Out Fox The $treet

This model was up 0.01% in November versus a 0.3% gain for the benchmark S&P 500. The model slightly under performed the market in November, which can happen in solidly positive months. As of the end of November, the model was up nearly 20% for the year compared to 12.5% for the S&P 500.   In general, the model had a very uneventful month with flat returns and no trades. Bottom Performers While the model was flat for the month, several stocks had meaningful moves in November. The weakest stocks were Kohl’s Corporation (KSS), WellPoint, Inc. (WLP) and Entergy Corporation (ETR) . Kohl’s lost nearly 16% due to a weak earnings report at the end of the month. The stock plunged from nearly $51 to below $46 on disappointing sales. The company continues a large buyback and should be able to load up on shares at these attractive levels. WellPoint plunged at the beginning of November due to the re-election of President Barack Obama, which secure...

--> This model was up 4.8% in August versus a 2.0% gain for the benchmark S&P 500. The model rebounded sharply from a weak performance in July. Trades As mentioned previously, one goal of this model is to slowly trim the amount of positions back closer to 20 after reaching 26 a few months back due to mergers and partial positions. Hence, the model only made a sell during August to reduce the position total down to 24. Express Scripts (ESRX) was sold as the merger with Medco Health (MHS) led to the reduction of share buybacks. Considering the company doesn’t pay dividends, it left the Net Payout Yield (NPY) heading towards zero. The stock was sold at $62.49 on the spike higher following strong earnings. This sell further highlights the ability of the model to be opportunistic when a position no longer meets the set criteria. Instead of having a rigid sell point at a quarter end, the model is able to trade positions when the market presents an ideal time. ...

Duke Energy (DUK) made significant news recently with the resigning of new CEO right at the closing of the merger with Progress Energy. The news was mind blowing considering the deal with shareholders, regulators, and consumers was that Bill Johnson from Progress Energy would run both companies with former Duke Energy CEO Jim Rodgers moving up to Chairman. How does this impact the stock? Outside of political and regulatory noise, it shouldn't honestly have a huge impact. Utilities are complex businesses, but it only takes a solid operator to run them. Jim Rodgers will have no problem running the merged entity. In fact, Jim Cramer remained bullish on the stock especially considering the stock price drop. 2012 Post Merger Earnings Guidance The bigger concern should be the lack of earnings growth and limited growth in the future. The combination created the country's largest utility as measured by enterprise value, market capitalization, generation assets, customers and numerous ...

September was another decent month for the Net Payout Yields model with a return vs. benchmark of 3.46% - the portfolio was down 3.72% while the S&P500 fell 7.18%. Naturally on an absolute basis the results are disappointing, but this model is not designed to time the markets. The goal remains to outperform on the way down and remain even on the way up, in the effort to produce superior returns over time. For 2011, the model remains roughly 7.0% higher than the benchmark. As of the end of September, year to date the model was down 2.92% while the S&P500 fell 10.04%. Trades The model was inactive for the second month during September as the weak market increased the yields and hence the valuation attractiveness of most of the equities in the model. A few stocks though have recently reached new 52 weeks highs causing the yields to decline. For example, Bristol-Myers Squibb (BMY) has seen the dividend yield drop to 4% and without a buyback the Net Payout Yield (NPY) has reac...

March was another solid month for this model, as it beat the benchmark (up 1.95% versus 0.10 loss for the S&P 500). The model also wrapped up a solid first quarter with a 6.57% gain. For a Risk Score 1 model, the goal remains to outpace the benchmark by a slight amount eac month with greatly reduced volatility as opposed to models in higher risk scores. Trades For the month, the model sold Walt Disney (DIS) and United Parcel Service (UPS) as their net payout yields dropped below acceptable levels. Those two stocks were replaced with Gap (GPS) and Entergy (ETR). GPS maintains a modest dividend of 2%, but has made significant buybacks in the last few years. On February 24th, they announced the Board of Directors approved an additional $2 billing share repurchase authorization and a increase in the annual dividend to $.45 for 2011. For Q4 alone, they repurchased $598M of stock or an annualized rate of nearly 18% making them a top 4 net payout yield stock . ETR is another top ...