From that year to October 22, large-cap stocks outperformed small-cap stocks by about 5 percentage points and about 22 percent to 17 percent, respectively. However, over the long term, from 1926 to today, small-cap stocks outperformed large-cap stocks, according to a study by Kenneth French and his colleagues at the University of Chicago.
I have a favorite size in stock. It has a market value of about $1 billion. In my opinion, this is the boundary between medium and small cap stocks.
Once a year we recommend 10 stocks with market values near this line. I call this my $1 billion portfolio.
My $1 billion portfolio has 16 exits with a total average annual return (including dividends) of 15.6%. This is above the 13.5%% average return for the Standard & Poor’s 500 Boundary Index. Of my 16 virtual wallets, 12 are profitable and 11 are over the S&P 500.
Please note that the results in my column are fictitious. It does not reflect actual transactions, transaction fees, or taxes. These results should not be confused with the performance of the portfolio I manage for my clients. In addition, past performance is not an indicator of future results.
Last year, my $1 billion pick had a 43.6% return. This is better than 35.6% of the S&P. My top winners were Encore Wire (Wire), a 137% increase, and Ultra Clean Holdings (UCTT), which was 88%. My worst result was a 33% loss of QiwiPlc. And a 5% loss on NetGear (NTGR).
And now here’s a new lineup of stocks that I love approaching the $1 billion mark. They are listed in alphabetical order.
Renault Employer Holdings (EIG) Renault specializes in industrial injury insurance. Tried to make 20NS profit for years in a row. Liabilities are about 2% of equity (mostly the company’s net worth) and have more than $5 cash per dollar.
German-American Bancorp (GABC) is a banking company based in Jasper, Indiana. I want the bank to generate more than 1.00% of their assets. The bank has been doing this for 13 consecutive years (it will be 14 years soon) and has surpassed 1.3% in the last 6 years.
Ichor Holdings Ltd. Fremont, California, manufactures gas and chemical supply systems for semiconductor manufacturing. As a relatively young company, Ichor has been profitable for the fifth year in a row and should make a profit this year.
John B. San Filippo & Sun Elgin, Ill. (JBSS) processing beans. He sells peanuts under Fisher and several other names, and also has a large business under his own brand. It is not a thriving industry, but it is profitable and recently increased its net margin to almost 7%.
A country weary of the pandemic could benefit from getting out of the house and having fun. That will help Johnson out in the open
Manufactures fishing, camping, and diving equipment in Racine, Wisconsin. Sales have been strong lately, and the dividend growth rate has also been outstanding.
MarineMax (HZO) is the largest cruise ship and recreational craft dealer in the United States. Growing income inequality, such as the enrichment of the rich and the departure of other groups, can hurt the state. But if you are a great boat dealer, and MarineMax has been doing very well over the last few years.
The National Health Service (NHC) is based in Murfreesboro, Tennessee and operates a nursing home. It’s a tough industry that has struggled to hire enough staff lately. However, with earnings of less than 7 times, the stock price seems very cheap.
NetGear second year
, manufactures wireless networking equipment for homes and small businesses. The San Jose, California-based company is consistently profitable, but the rate of profit has gone from mediocre to extraordinary. Shares traded for 10x profit.
As the name suggests, it is connected to a computer
Retail sale of computers, software and related goods. I like that balance and my debt is only 1% of my equity. The company has been profitable for 14 of the last 15 years. However, the profit rate is sometimes attractive.
Sold at an estimated 10x sales, Standard Motor Products (SMP) in my opinion are rather cheap. The company, based in Long Island City, New York, manufactures parts for cars and trucks. It offers a 2.1% dividend yield and has increased its dividend by almost 13% annually for the last decade.