• 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
  3. / Stocks

Active vs. Passive: How Are My Triple Net Portfolios Doing?

I believe within this deep value pond, an active approach can outperform passive, but what do the numbers say after six months?
By JONATHAN HELLER
Apr 30, 2021 | 11:30 AM EDT
Stocks quotes in this article: HAYN, SANM, DAKT, MSGE, CULP, REX, WEYS, AGX, GSIT, AIR, UFI, RES, ACLS

Halfway there, six months since inception, my 2020 Triple Net Active Versus Passive Portfolio continues to deliver decent absolute results, but both portfolios slipped over the past month.

The Active Portfolio, unveiled on October 21 and October 23 (up 34%) is trailing the Passive Portfolio (up 37%). Over the past month, the Active portfolio fell about 4%, while the Passive portfolio gave back about 3%.

Both portfolios, however, now trail both the Russell 2000 Index (up 42% since 10/15), and Russell Microcap Index (up 53%). Value also continues to soar with the Russell 2000 Value Index (up 55%) and Russell Microcap Value (up 63%) continuing to gain ground.

By way of a reminder, the idea behind this experiment of mine is the belief that companies trading at relatively low levels of net current asset value or NCAV, have the potential to provide solid returns. Criteria included the following:

  • 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)

Twenty-seven names made the cut, and are included in the Passive Portfolio. I then selected the eight names that are most interesting to me, which comprise the Active Portfolio, and took positions in all eight. My belief is that within this deep value pond, an active approach can outperform passive.

All eight Active names remain in positive territory, with Haynes (HAYN) (up 63%) continuing as the top performer. On Thursday, Haynes reported a much lower-than-expected second-quarter loss ($0.29 versus $0.58 consensus), while revenue of $82.1 million was $5.8 million ahead of the consensus. HAYN ended the quarter with nearly $70 million, or $5.60 per share, in cash and $8.3 million in debt. The company is expected to return to profitability next year, and trades at 36x 2022 consensus estimates, and 16x 2023 estimates.

Overall, it was a fairly boring month for the Active Portfolio, and not a great deal has changed. Sanmina (SANM) (up 57%) remains in second place, while Daktronics (DAKT) (up 56%) rounds out the top three. Madison Square Garden Entertainment (MSGE) (up 32%) had a decent month, rising 9%, but is well off its March $121 intraday high.

Performance of the Remaining Active Names:

Culp (CULP) (up 5%)

REX American Resources (REX) (up 15%)

Weyco Group (WEYS) (up 26%)

Argan (AGX) (up 18%)

All but one of the Passive names, GSI Technology (GSIT) (down 13%) remains in positive territory. The best Passive performer (which includes the Active names plus 19 others) is still AAR Corp (AIR) (up 103%) for the fourth consecutive month. Unifi (UFI) (up 91%), RPC Inc (RES) (up 84%), round out the top three Passive performers. Axcelis Technologies' (ACLS) (up 78%) 15% rise over the past month put it in fourth place.

Six months in, the Passives are ahead.

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 was Long AGX, CULP, DAKT, HAYN, MSGE, REX, SANM and WEYS.

TAGS: Investing | Markets | Stocks | Trading | Value Investing

More from Stocks

A Rally Driven by Fear (of Missing Out)

James "Rev Shark" DePorre
May 27, 2022 4:28 PM EDT

What's next after this seesaw week? One thing is for sure: More volatility.

Let's Take Nikola for a Spin. And Then Return It

Mark Sebastian
May 27, 2022 2:56 PM EDT

I wouldn't want to own NKLA, but I could see riding it for a few days.

3 High-Yield Retail Stocks With Attractive Valuations

Bob Ciura
May 27, 2022 1:30 PM EDT

Here's the bull case for three retail stocks that offer low valuations and high dividend yields.

Here's How to Wrangle JPMorgan, the '800-Pound Gorilla' of Banking

Brad Ginesin
May 27, 2022 1:27 PM EDT

The financial services giant just held its first investor day in three years -- let's open the vault and see what's inside.

As Zscaler Rallies, Charts Say the Stock Could Hit This Level Soon

Bruce Kamich
May 27, 2022 1:23 PM EDT

Here's how aggressive traders can play the cybersecurity name.

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

  • 10:58 AM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    "The Tremendous Power of the Sell Button"
  • 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...
  • 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