One Year Later. The U.S. Conviction Picks Beat The Market, With No Magnificent 7

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A U.S. GARP portfolio was created in mid-2023.Our personal stock portfolio from 2015 has outperformed the market by 1.5% annually.The GARP portfolio focused on growth at a reasonable price, avoiding ...

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The U.S. Conviction Picks Beat The Market, With No Magnificent 7","media":"seekingalpha","content":"<div>\n<p>A U.S. GARP portfolio was created in mid-2023.Our personal stock portfolio from 2015 has outperformed the market by 1.5% annually.The GARP portfolio focused on growth at a reasonable price, avoiding ...</p>\n\n<a href=\"https://seekingalpha.com/article/4701274-one-year-later-the-us-conviction-picks-beat-the-market-with-no-magnificent-7\">Source Link</a>\n\n</div>\n","source":"seekingalpha","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>One Year Later. 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The U.S. Conviction Picks Beat The Market, With No Magnificent 7\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-06-27 19:00 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4701274-one-year-later-the-us-conviction-picks-beat-the-market-with-no-magnificent-7><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>A U.S. GARP portfolio was created in mid-2023.Our personal stock portfolio from 2015 has outperformed the market by 1.5% annually.The GARP portfolio focused on growth at a reasonable price, avoiding ...</p>\n\n<a href=\"https://seekingalpha.com/article/4701274-one-year-later-the-us-conviction-picks-beat-the-market-with-no-magnificent-7\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"LU1496350502.SGD","symbol_name":"FRANKLIN DIVERSIFIED DYNAMIC \"A\" (SGDHDG) ACC","start_time":0,"source_url":"https://seekingalpha.com/article/4701274-one-year-later-the-us-conviction-picks-beat-the-market-with-no-magnificent-7","article_id":"2446539099","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1690862130/image_1690862130.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2446539099","pubTimestamp":1719486000,"columns":[],"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"A U.S. GARP portfolio was created in mid-2023.Our personal stock portfolio from 2015 has outperformed the market by 1.5% annually.The GARP portfolio focused on growth at a reasonable price, avoiding e","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"LU1496350502.SGD":"FRANKLIN DIVERSIFIED DYNAMIC \"A\" (SGDHDG) ACC","BK4548":"巴美列捷福持仓","LU1974910355.USD":"Allianz Thematica Cl AMg DIS USD","00201":"华大酒店","JNPR":"瞻博网络","IMO":"帝国石油","CMCSA":"康卡斯特","HSBA.UK":"汇丰控股有限公司","IVV":"标普500指数ETF","SH":"标普500反向ETF","VYM":"红利股ETF-Vanguard",".SPX":"S&P 500 Index","HSBC":"汇丰","BK4532":"文艺复兴科技持仓","TSM":"台积电","UPRO":"三倍做多标普500ETF","XOM":"埃克森美孚","VOO":"Vanguard标普500ETF","OEX":"标普100","UNH":"联合健康","03145":"华夏亚洲高息股","LU1430594728.SGD":"Eastspring Investments - Global Low Volatility Equity AS SGD","SSO":"两倍做多标普500ETF","AMGN":"安进","LU1244550494.USD":"FRANKLIN GLOBAL MULTI-ASSET INCOME \"A\" (USDHEDGED) ACC","CVX":"雪佛龙","CNQ":"加国自然资源","KR":"克罗格","LOW":"劳氏","SPXU":"三倍做空标普500ETF","SCHD":"Schwab US Dividend Equity ETF","BLK":"贝莱德","CAT":"卡特彼勒","TTDKY":"TDK Corp.","03143":"华夏香港银行股","RTX":"雷神技术公司","BRK.B":"伯克希尔B","SU":"森科能源","00005":"汇丰控股","OEF":"标普100指数ETF-iShares","DKS":"迪克体育用品","SPY":"标普500ETF","CARR":"开利全球","LU0541501648.USD":"ALLSPRING  EMERGING MARKETS EQUITY \"A\" (USD) ACC","TRMLF":"Tourmaline Oil Corp.","SDS":"两倍做空标普500ETF","MDLZ":"亿滋","GIS":"通用磨坊"},"translate_title":"一年后。美国信念精选跑赢大盘，但没有宏伟的7","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"LOW":1,"XOM":1,"VYM":1,"UNH":1,"TTDKY":1,"TSM":1,"TRMLF":1,"SU":1,"SCHD":1,"RTX":1,"MDLZ":1,"KR":1,"JNPR":1,"IMO":1,"GIS":1,"CVX":1,"00201":1,"CNQ":1,"CMCSA":1,"CAT":1,"BLK":1,"BRK.B":1,"AMGN":1,"DKS":1,"CARR":1,"VOO":0.86,"SPY":0.86,"00005":0.69,"SPXU":0.6,"OEX":0.6,"SSO":0.6,"03145":0.6,"03143":0.6,"UPRO":0.6,"SH":0.6,"SDS":0.6,"OEF":0.6,".SPX":0.6,"IVV":0.6,"HSBC":0.6,"HSBA.UK":0.6,"ESmain":0.6},"content_text":"A U.S. GARP portfolio was created in mid-2023.Our personal stock portfolio from 2015 has outperformed the market by 1.5% annually.The GARP portfolio focused on growth at a reasonable price, avoiding excessive valuations, and excluded the Magnificent 7 stocks.One year later the portfolio has beat the S&P 500 by 9%.The 12 conviction picks still look attractive. I offer additional stocks for consideration in 2024.   Tim Robberts By request, I put together a U.S. stock portfolio in mid 2023. Our own personal stock portfolio from 2015 has beat the market by about 1.5% annual. But given the excessive valuations of many of our holdings I would not pick many of them to build a portfolio, in 2023, or today. I was looking for growth at a reasonable price. By design the portfolio includes none of the Magnificent 7. The portfolio goal was very solid gains while avoiding excessive valuation. That the 12 conviction picks could greatly beat the market (by 9%) is a welcome surprise. From mid 2023 - Building the U.S. stock portfolio in 2023. In that post you'll find the larger list of stocks for 2023, plus the double-asterisked conviction picks. I was looking for growth at a reasonable price, often called a GARP approach ... When building the dividend growth portfolio in 2023 I looked to Schwab's (SCHD) that includes dividend growth and financial screens. I also looked to Vanguard's (VYM) that offers greater value and a nice sector arrangement. I also considered my current holdings. And yes, I considered VIG holdings. Here's the update post from February 2024 - 12 Conviction picks beating the S&P 500 without help from the Magnificient 7 Here was the total return tally. The conviction picks: Wells Fargo (WFC), Berkshire Hathaway (BRK.B), HSBC Holdings (HSBC), Lowe's (LOW), Kroger (KR), Amgen (AMGN), Comcast (CMCSA), Dicks Sporting Goods (DKS), Chubb Limited (CB), TDK Corp (OTCPK:TTDKY), Juniper Networks (JNPR) and Caterpillar (CAT).   Conviction Picks vs S&P 500 (Portfolio Visualizer / Author ) And keep in mind it is all about the total return in the accumulation stage. More money creates more retirement income. The dividends don't matter.  PE Ratio and Growth update to June 2024 The beat over the S&P 500 has accelerated in 2024. We'll get to the performance charts in a minute. Over one year the conviction picks are beating the market by a surprising 9%. And as expected, when stocks go on a price gain tear the valuation can become less attractive. We'll often see an increase in the PE ratio - we're buying less earnings at elevated stock prices. Here's the updated look at PE ratios and growth metrics as per Seeking Alpha. PE and Growth represent the original PE and Growth figures from one year ago. June represents the updates to June 2024.           Symbol Name PE June Growth June   WFC Wells Fargo 9.5 11.70 A- A   BRK.B Berkshire Hathaway 21.4 20.79 A C   HSBC HSBC Holdings 6.9 8.95 A+ C-   LOW Lowe’s 17.5 17.02 B- D-   KR Kroger 10.8 11.73 C- D   AMGN Amgen 13.3 15.71 B+ C-   CMCSA Comcast Corp 11.9 8.74 C- C-   DKS Dick’s Sporting 9.8 16.59 B- A   CAT Caterpillar 14.4 15.02 C+ D+   CB Chubb Limited 11.1 12.14 B- C   TTDKY TDK Corporation 12.5 21.58 C+ A-   JNPR Juniper Networks 12.5 18.45 B C   Click to enlarge Where you see the exaggerated increase in PE ratios, you'll find incredible and welcome price gains are the culprit. That said, I still think the combination of PE ratio and growth prospects is attractive for ALL of the 12 stocks in June of 2024. The performance update to June Here's the total return update to the end of May 2024. It's 37% vs 28%, in favour of the conviction picks. Conviction picks 1-year (Portfolio Visualizer / Author )Conviction Picks Table (Portfolio Visualizer / Author )U.S. stocks assets (Portfolio Visualizer / Author) We can see that the 'beat rate' for the portfolio is very good. Eight of the stocks beat the S&P 500. There are no losers, and only one company is weak - Comcast (CMCSA). That said, Comcast might look better today compared to one year ago. The PE ratio moved down to 8.7 from 11.9 while the growth rating held at C-. On Seeking Alpha, Comcast is rated number one in the cable and satellite sub sector. The biggest PE ratio expansion was courtesy of TDK, from 12.5 to 21.6 but the growth rating went from C+ to A+. The next bigget PE expansion was from Dick's Sporting Goods, but that growth profile went from B- to A. It's got more game. Seven considerations from the master list I really like BlackRock (BLK). That is one of my personal U.S. stock picks. The PE ratio is quite reasonable at 18.9 PE and it earns a B on growth. Here's a recent update on our personal U.S. stock portfolio. With BlackRock we are essentially earning fees on the global stock markets by way of ETFs. You're taking tolls on stock markets. As markets rise and investors buy more ETFs, fees collected increase. And of course, the U.S. dominates global markets. BlackRock's Aladdin is also a very good growth driver. On creating retirement income with stocks I used BlackRock as an example - Living off of the dividends? Don't sell yourself short.  UnitedHealth (UNH) looks very solid with a good growth profile. The stock has very good 5 and 10 year total return numbers but has stalled in the past three years. Remember when it comes to owning stocks and ETFs the waiting is the hardest part. We spring load the portfolio waiting for the next move up. SA analysts and Wall Street really like the stock. SA Quant is lukewarm with a hold. Mondelez (MDLZ) offers a more favourable PE ratio compared to one year ago, now at 18.9. The stock has had a move up in growth to a B- rating. General Mills (GIS) looks solid as a defensive holding. The PE Ratio is 14.1 while the growth score is C-. RTX Corporation (RTX) looks very solid. That is one of my portfolio holdings. The PE ratio is 19.5 and the growth rating earns a C. RTX is a strong buy on Seeking Alpha Quant. Carrier (CARR) is another one of the United Technology spinoffs that I hold. It's a bit expensive at a 22.5 PE ratio, but looks very solid on its growth profile. Growth is at B- up from C- (from 6 months ago). I added to CARR again about a month ago. I've added to that stock continually from the time of spin off. It has been a wonderful performer. Taiwan Semiconductor Manufacturing (TSM) had a great run and is a bit expensive, but the growth profile is very strong. It might be a consideration for the AI and semiconductor space. It is a Seeking Alpha Quant strong buy. Add these seven stocks to the 12 conviction picks and you have a list of 19 stocks for consideration in June of 2024. Add some energy to your portfolio One of the greatest areas of free cash flow is the oil and gas sector. I put Canadian oil and gas stocks on the table in late 2020 - or about 400% ago as I like to 'brag'. On Seeking Alpha I showed the ridiculous dividend growth. These companies are buying back shares and paying dividends (shareholder yield) like nobody's business. They are also paying down debt in aggressive fashion. And given that the sector is still out of favour, the valuations are very attractive. I focus on what I call The Canadian Big 4. Canadian Natural Resources (CNQ), Suncor (SU), Imperial Oil (IMO) and Tourmaline (OTCPK:TRMLF). Tourmaline is more natural gas weighted. For the U.S. you can check out the top integrated oil and gas page on Seeking Alpha. You might consider some go-to stocks such as Exxon-Mobil (XOM) and Chevron (CVX). A few more value stocks for consideration  In this Tweet, we see 12 undervalued (with upside) stock ideas from Morningstar. On the list is Wells Fargo and RTX ... That's a solid list. You can find a nice mix of defense and growth for consideration. And what a coincidence, you'll find XOM on that list. Shaping your portfolio We all have specific goals and risk tolerance. Those in the accumulation stage are best served going for growth, while investing within their risk tolerance level. More money is more better. - Dale Given that, accumulators might be more forgiving on slightly excessive earnings ratios. They have time to allow a company to grow into its PE ratio. Retirees may look more to defensive sectors for retirement. That would mostly include consumer staples, healthcare and utilities. Defensive sectors were much better than the traditional balanced portfolio through and beyond the financial crisis. That approach exited the recession with a 50% greater portfolio value compared to the balanced portfolio. And of course, do the research to ensure you have a solid financial plan, and understand all tax considerations. The above is not advice, but ideas for consideration. To my eye, in 2024 we can still build a wonderful stock portfolio that offers an attractive combination of growth and valuation. Read. Decide. Invest. Please fire away in the comment section. I do try to address or answer all comments and questions.  Editor's Note: This article discusses one or more securities that do not trade on a major U.S. exchange. 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