• 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
    • Doug Kass
    • Bruce Kamich
    • Jim Cramer
    • 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
  3. / Stocks

So Far, So Good for My 2019 Double-Net Value Portfolio

The 22 names in the portfolio as a group are outpacing the value components of the Russell 2000 and Russell Microcap indices.
By JONATHAN HELLER
Jan 14, 2019 | 11:00 AM EST
Stocks quotes in this article: RCKY, CNXN, UVV, DRQ, ASTE, TITN, AE, AGX, AVT, AVX, AXTI, BHE, BPI, CATO, FLXS, GENC, HIBB, HURC, ZEUS, POWL, TPC, VRA

It's early for sure, but just under a month since its Dec. 18 inception my 2019 Double Net Value Portfolio, is doing its job, so far anyway.

The 22 names in the portfolio are up an average of 7.9% versus a 5.2% increase for the Russell 2000 Index and 5.7% increase for the Russell Microcap Index. Perhaps more importantly, it is outpacing the value component of each index by a greater margin; the Russell 2000 Value Index is up 4.3% and Russell Microcap Value Index is up 5.4%.

The rising tide of the markets, coming off of a bad end to 2018 has lifted many boats, including those with a few holes. For the most part, names in this year's Double Net Value portfolio were beaten up badly in 2018. Indeed, just three -- Rocky Brands Inc. (RCKY) (up 40%), PC Connection Inc. (CNXN) (up 15%) and Universal Corp. (UVV) (up 8%) -- were in positive territory last year. Given that the portfolio is also up 11.5% year to date, I'd venture to say at least some of the names are the beneficiaries of investors taking advantage of the fallout from year-end tax-loss selling.

Since inception, all but one name, Universal Corp. (down 4%), is in positive territory. Dril-Quip Inc. (DRQ) (up 21%) is the top performer on no news. However, it is a great example of a name that foundered in 2018, especially the second half of the year; it fell more than 50% from mid-July to late December and has been recovering ever since. Since bottoming in the $27 range on Dec. 24, Dril-Quip shares are up more than 40%. The company is not expected to be profitable, with the consensus calling for a 12-cent loss for the year. Dril-Quip is expected to return to profitability in 2020 and currently trades for about 50x 2020 consensus estimates, although it is a fairly wide range of estimates.

Infrastructure name Astec Industries Inc. (ASTE) (up 18%) has also recovered somewhat after bottoming in mid-December. The stock had a horrendous 2018 and was down nearly 48%. Most of the damage was done following the announcement of both second- and third-quarter results, when the stock fell 21% and 25%, respectively. Astec currently trades at about 13x forward earnings estimates.

Titan Machinery Inc. (TITN) (up 17%) is the third-best performer so far with a similar performance story; the stock was clobbered in December and has been in recovery mode since. TITN currently trades at about 17.5 X next year's consensus estimates.

Here's how the other members of the portfolio have fared since inception:

Adams Resources & Energy (AE) (+4.7%)

Argan Inc. (AGX) (+1.8%)

Avnet Inc. (AVT) (+10.9%)

AVX Corp. (AVX) (+5.8%)

AXT Inc. (AXTI) (+8.1%)

Benchmark Electronics Inc. (BHE) (+6.8%)

Bridgepoint Education Inc. (BPI) (+1.9%)

Cato Corp. (CATO) (+1.5%)

Flexsteel Industries Inc. (FLXS) (+12.3%)

Gencor Industries Inc. (GENC) (+8.4%)

Hibbett Sports Inc. (HIBB) (+10.2%)

Hurco Cos. (HURC) (+3.2%)

Olympic Steel Inc. (ZEUS) (+3.1%)

PC Connection Inc. (CNXN) (+4.7%)

Powell Industries Inc. (POWL) (+12.3%)

Rocky Brands Inc. (RCKY) (+10.9%)

Tutor Perini Corp. (TPC) (+6.9%)

Vera Bradley Inc. (VRA) (+9.8%)

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, Heller was long VRA.

TAGS: Investing | Stocks | Value Investing | Automobile Components | Construction & Engineering | Consumer | Defense | Energy | Software & Services | Technology | Technology Hardware & Equipment | Industrial Goods | Industrials | Manufacturing | Real Money

More from Stocks

Navigating a Market Correction

James "Rev Shark" DePorre
Feb 27, 2021 10:00 AM EST

The most critical factor in long-term market success is the ability to effectively navigate market corrections.

Corrective Action Produces Fading Confidence and Technical Damage

James "Rev Shark" DePorre
Feb 26, 2021 5:08 PM EST

It's dangerous to have too much exposure now, but the potential for a good recovery is there once interest rate issues are digested.

I'm Intrigued by the Recent Pullback in Aurora Mobile

Timothy Collins
Feb 26, 2021 3:30 PM EST

While the Chinese company is still not profitable, it is cash flow positive.

Salesforce Gets a Quant Downgrade on Top of Weakening Charts

Bruce Kamich
Feb 26, 2021 12:50 PM EST

Here's what investors and traders need to think about.

My Preference Right Now Is to Buy Pre-Deals

Timothy Collins
Feb 26, 2021 12:36 PM EST

I've added a few names that I see as a great risk-reward because of the limited downside.

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

  • 11:32 AM EST JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    Navigating a Market Correction
  • 11:29 AM EST GARY BERMAN

    Where Does the Nasdaq Go From Here?

    Where does the Nasdaq Composite (CCMP) index go fr...
  • 12:31 PM EST GARY BERMAN

    Has the Short-Term Top Come for the XLF/Banks?

    The has triggered a long-term overbought signal ...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2021 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