PSB Portfolio Update June 2015

| June 18, 2015

portfolio update

A Bit More Volatility 

The stock market has seen an uptick of volatility since our last update.  There’s been a tad more whipsawing than what we’re used to seeing this time of year.

However, the actual gain/loss results for the major indices are as mundane as ever.  The S&P 500 is down about 1% from last month, and remains up about 3% on the year (and near record highs).  Meanwhile, small caps are up a percent over the same period, and have climbed 6% for the year.

The only really interesting thing from all this data is the outperformance of small caps so far this year, despite a slightly increased level of volatility.  It’s certainly not the norm for this kind of market environment.

Speaking of volatility, the biggest area of concern continues to be Greece (and its potential exit from the Euro).  If Greece leaves the Euro, it could trigger a series of defaults that rile the market.  No one knows for sure of course.  Ultimately though, I believe a deal will get done.

In the US, the economy has shown clear signs of improvement from earlier this year.  In particular, the job market is as strong as it’s been in many years.  That’s obviously a good sign for the economy.

The Fed is going to continue to be cautious and rely on economic data to make policy decisions.  A rate hike is likely to occur this year, and maybe more than one.  But, any hike will be small and shouldn’t alter the accommodative approach by the central bank.

Meanwhile, our portfolio continues to thrive.  The vast majority of our positions are up.  And, some of our holdings are up a substantial amount.  As always, I’ll continue to search for the best opportunities each and every month.

Now, let’s take a look at a few of our more interesting positions. 

Position Update

. . . . JAKKS Pacific (NASD: JAKK) – Hold

JAKK continues to be a great trade for us.  We’ve had this position on for 6 weeks and have already made 27%.  To put that in perspective, that’s roughly 233% gains on an annualized basis.

The really good news is that JAKK’s run is being driven by insiders and institutions.  One big investor has taken a $200 million stake in the company.  Plus, management has authorized a buyback of $30 million.

Of course, this is all great news for shareholders.  And, it could be just the start of a long-term bullish trend.  Let’s keep holding this gem for bigger gains ahead.

. . . . Marin Software (NASD: MRIN) – Hold

Another recent position that has broken higher in recent weeks is MRIN.  This 10-week old position is up 20% over the last month.  It’s now a 17% winner for us.

There isn’t a whole lot of news out driving the recent gains.  There are some rumors of some kind of deal between MRIN and Facebook (FB), but nothing concrete.  The company has also launched a new budget optimizer tool.

Regardless, the stock is moving higher, and that’s good for us.  With the recent surge, we’re moving MRIN from Buy to Hold.

. . . . GAIN Capital (NYSE: GCAP) – Hold

GCAP continues to thrive in our portfolio.  Max gain has been as high as 66%.  And, the stock price is still hovering within a couple percent of 52-week highs.

Despite the general sideways movement of the shares for the last couple months, the position is paying off in other ways… namely, dividends.  In fact, GCAP just issued another dividend on June 10th.

With the latest $0.05 dividend, our entry price has been effectively lowered to $6.23.  It’s hard to complain about a stock that’s up well over 50% and is regularly issuing dividends! 

Action to Take 

  • Move Marin Software (NASD: MRIN) from Buy to Hold

Category: PSB Portfolio Updates

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