Happy New Year!
With the changes made to bring the Buffett Score back, I expected things to settle down quite a bit. Settle down, they did. There are very few changes this month, mainly because few companies actually report during December so things are rather static.
No more waffling though, let’s talk updates.
There was one new stock added to the list this month, and two removed. Let’s start with Smith & Wesson Brands (SWBI).
SWBI did report in early December, and the stock is down some 30% since that report. The company saw falling revenues, falling net incomes (the consistent earnings point was lost), and reported negative free cash flows (FCF point lost).
SIG, Signet Jewelers, also reported in December. It saw increasing revenues, but decreasing same store sales, and decreasing operating/net incomes.
Decreasing net incomes mean that the company has lost its manageable debt point. It’s calculated by asking “is debt less than 3 years of net income” and, despite not taking on new debt, this is no longer true for Signet.
The New Stock: Accenture
Accenture (ACN) is the new stock added to the list. The company specializes in IT services and consulting. So, if your business is having technical issues, Accenture might be a place they turn.
The company offers a variety of solutions from building out complete software services to offering outsourcing of your customer support.
It’s a big business with a market cap over $175B, and that’s after losing 35% over the last year.
Buffett Score Performance in December
I’ve started tracking performance of the stocks in the list. A month probably isn’t long enough to be considered “fair,” but it’ll be interesting to look back in 3-6 months and see how things have performed.
Here’s a handy link to the sheet where I’ll track each month’s bucket: Google Sheet: Buffett Score Performance.
This month, the portfolio is down 7.3% versus a drop of 5.82% for the S&P 500. Pretty much every stock in the list dropped with the exception of INVA and SIG (the one leaving the list). SWBI is the one that dragged us down into the pit of despair.
Oh, and another note on a different portfolio, the PEG driven one. A Redditor gave the idea, so I got it set up. It asks that we buy stocks with a PEG between 0 and 1. There were 12 last month, and they’re down 5.21%, so a little better alpha than the S&P’s -5.82%.
All of the stocks remain the same in that bucket heading into January so there will be no “sales” or “purchases” and we’ll just let it roll.
Here’s a link to that portfolio if you’d like to follow along: Buffett Score PEG Portfolio.
Next Month
Next month should be full of more significant updates given that many companies report in January. That update should be in your inboxes on Wednesday, Feb 1, so keep an eye out for it.