Number of Stocks: 14 (goal is 16 plus or minus 4)
Company Size: We assume this is still the same as last month. Large, Mid and Small are all out of tolerance. Our intent was to lower large cap and increase small or mid cap.
Sectors: We assumed this is still the same as last month. All in tolerance except for Technology. We decided that whatever we did we would try to lower our exposure in Technology and at a minimum we would not increase it.
Individual Stock Percentage: Neutral Tandem (TNDM) is too low as a percentage of our portfolio. Our methodology says that we need to sell or add more.
Percent Annual Return: in the sweet spot but on the low side
Quality: Good
Growth: in tolerance but on the low side
Individual Stocks analysis: Two stocks are of concern.
Neutral Tandem (TNDM) due to being a small percentage of the portfolio and the news on Apollo (APOL)is not good. Irene sent out before the meeting some analyst notes about Apollo. Most telling was the comment by one analyst that an investor should "forget about it". Also, the PAR for Apollo is 28 which is well above the sweet spot and just too good to be true.
Our intent this month is to maintain PAR and Growth while improving Mid and Small company size while addressing the stock that is a small portion of the portfolio.
DECISION: Sell all of Apollo based upon the negative news and our poor expectation about the future of the company given the government take over of college funding (for profits will most likely be squeezed by the government). With the proceeds from the sale and our available cash we voted to purchase $3,000 worth of US Ecology (ECOL) and about $1800 of Neutral Tandem (TNDM). Both stocks are small cap and have PAR's in the sweet spot. The purchase of additional TNDM also raises its percentage of the portfolio into the acceptable range.
