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The Lucky 13

01/30/2017 7:00 am EST


Kelley Wright

Managing Editor, Investment Quality Trends

In January, 2000, we initiated The Lucky 13 portfolio to assist subscribers in establishing a foundation for their investment portfolios, observes dividend expert Kelley Wright, editor of Investment Quality Trends.

For the fifteenth time in its seventeen-year history, The Lucky 13 portfolio realized a positive total return with a gain of 16.30%.

Obviously, we welcome the positive performance for the year; however, we don’t believe that the return for any one-year period is reflective of a long-term body of work.

With that being said, since its inception in January, 2000, the arithmetic average annual total return for the portfolio is 12.69%. The compound annual growth rate (CAGR) is 11.83%.

When compared to the arithmetic average annual return of 6.14% and CAGR of 4.47% for the S&P 500 over the same time period, the long-term benefit of limiting portfolio considerations to high-quality companies that offer good current value are clear to see.

We reprise five of last year’s components: Boeing (BA), CVS Health (CVS), International Business Machines (IBM), Omnicom Group (OMC) and Texas Instruments (TXN), which means they obviously are buys.

I am holding off on recommending new money into the energy stocks until their economic internals improve, but if you are already long the stocks just continue to hold.

Coca-Cola (KO) is at its Undervalued high-yield area, and therefore technically a buy, but I would really like to see the P/E at 19 or lower before initiating a new position or adding to an existing one.

Gap (GPS) has excellent internals, but I like TJX Companies (TJX) in this space right now as there is simply no better retailer.

UnitedHealth Group (UNH) is still at Undervalue even after a huge year, but I want to see what changes Congress has in store for the Affordable Care Act, and how that could potentially impact health insurers.

I love Wal-Mart Stores (WMT), and at Undervalue the shares are a buy. Applied Industrial Technologies (AIT), AT&T (T), and Emerson Electric (EMR) are now in Rising Trends, and therefore are holds.

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