March 11, 2010 11:44 AM ET
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Alfonso J Mooney
Strategy Undercapitalized sectors
Category Value
Average trade replication time 2 minutes
2,685 Views
5 Subscribers
Fees 1.50% of invested assets p.a. Subscription Min $5,000.00*
Sectors go through ‘capitalization cycles’ where they are in or out of favor with investors, meaning that relatively large or small amounts of capital are available to them. Companies in sectors no one is interested in benefit from lower competitive pressure, as competitors can’t raise money. As the sectors move back into favor PE ratios in the sector rise. Long term buy and hold model in search of... [more +]
Looking for under-capitalized sectors. Believes sectors go through medium to long term capitalization cycles. When investor demand increases, capitalization increases and competition increases. Ideally looking for sectors moving from over to under capitalization. Indicators for under-capitalized sectors are many and he finds it a largely unstructured task in screening. Some indicators are analyst... [more +]
Widely read on investment theses, and regular reviewer of investment news, opinions and blogs. Serendipitously research sectors from them. Looks at fundamentals of the company prospects and investing on value of price/replacement value, where replacement is an estimated cost of recreating the business assets.
Finds relatively few opportunities and monitors sentiment indications of the market to drive asset allocation decision of cash versus vested percentage. Often keeps significant cash balance if he can’t find appropriate opportunities.
While text book value investing advocates selling at intrinsic fair value, he has found better returns by adding a momentum “kicker” to the sell process with trailing stops, allowing him to hold his position to move to over 10% of his intrinsic fair value before fully selling out.
Not a contrarian as he believes you can get killed standing in the way of momentum.
Investment Report
A holding that has been one of my favorites for a while been Hillenbrand Industries (HI), a casket-maker that is highly profitable, non-cyclical, has an excellent niche, and, even more, was cheap. Hillenbrand was spun off of a larger company (also called Hillenbrand Industries), which also comprised medical equipment maker Hill-Rom (HRC), and showed an excellent commitment to focusing on a very...
March 2010
Personal Background
- Spends significant time researching his investments.
- History Professor at University of Oklahoma, about to have a baby.
Experience on Covestor.com‡
Alfonso J Mooney's Covestor.com Profile
- Overperformed S&P 500 for 22 of their 33 months on Covestor.com#
- Return Since Inception: 54.00% (June 2007)
- Last 3 Months Return: 5.50% (S&P 500 0.81%)
- Annualized Return: 16.94%
- Sharpe Ratio: 0.93 (S&P 500 -0.09)
- Maximum Drawdown: -23.55% (S&P 500 -56.78%)
Performance
| Inception April 14, 2009 | Model Manager | S&P 500 |
|---|---|---|
| Return Since Inception (%) | 12.09 | 36.14 |
| Annualized Return (%) | 13.45 | 40.67 |
| Month to Date Return (%) | 0.80 | 3.72 |
| Calendar 3 Month Return (%) | 2.72 | (0.39) |
| Sharpe Ratio | 1.38 | 2.12 |
Monthly Performance (%)
| Month | Return | S&P500 | Outperformance | Risk | Performance |
|---|---|---|---|---|---|
| Feb | 3.27 | 2.85 | 0.41 |
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| Jan | (0.20) | (3.70) | 3.50 |
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| Dec | 0.69 | 1.78 | (1.09) |
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| Nov | 6.34 | 5.74 | 0.60 |
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| Oct | 0.01 | (1.98) | 1.98 |
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| Sep | 0.20 | 3.57 | (3.37) |
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| Aug | 2.85 | 3.36 | (0.51) |
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| Jul | (0.00) | 7.41 | (7.42) |
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| Jun | (2.49) | 0.02 | (2.51) |
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| May | 0.29 | 5.31 | (5.02) |
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The performance of the model manager's account has been calculated by CVIM on a daily time-weighted basis including cash and broker commissions. These returns do not reflect any CVIM suitability or risk score restrictions and are exclusive of CVIM fees. Therefore, they do not represent the performance of the CVIM model available for subscription. Benchmark returns have been calculated by CVIM using a time-weighted calculation of daily valuations and do not include cash or transaction costs. Please see the additional disclosures below.
Top Holdings
| Symbol | Security | Exchange | Allocation (%) |
|---|---|---|---|
| DBA | POWERSHARES DB AGRICULTURE FUND | AMEX | 15.18 |
| HI | HILLENBRAND INC COM | NYSE | 15.06 |
| UNH | UNITEDHEALTH GROUP INC COM | NYSE | 14.70 |
| WMT | WAL-MART STORES COM | NYSE | 11.86 |
| PG | PROCTER GAMBLE CO COM | NYSE | 11.15 |
Total Holdings 9
Data displayed is as of market close: March 10, 2010
Recent Transactions
| Symbol | Security | Type | Price |
|---|---|---|---|
| POT | Potash Corporation of Saskatchewan Inc. | Buy | $94.56 |
| HI | Hillenbrand, Inc. | Sell | $19.83 |
| PG | Procter & Gamble Company (The) | Sell | $59.44 |
| MHP | McGraw-Hill Companies, Inc. (The) | Buy | $29.99 |
| DBA | PowerShares DB Agriculture Fund | Sell | $25.98 |
Data displayed is as of market close: March 10, 2010
* The Subscription Minimum is the minimum subscription required to follow a particular model. The minimum amount is determined by CVIM, based on the characteristics of the underlying model. It should not be considered as specific investment advice for your investment situation.
‡ Covestor.com performance data has been calculated by Covestor on a daily time-weighted basis of the equity positions of the account and is exclusive of any commissions and cash in the portfolio. The member's performance on Covestor.com, based on a separate account, may not reflect the strategy employed to manage the model available for subscription on CVIM. Please see additional disclosures below.
# Since the model manager's inception in Covestor.com
It should not be assumed that any information discussed herein will prove to be profitable or that decisions in the future will be profitable or provide similar results. The information set forth herein is not a substitution for personalized investment advice, and should not be construed as a recommendation to purchase or sell a particular security or to subscribe to a particular model.
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