This portfolio is made up of the 15 defensive stocks that are trading at the lowest PE Ratio. The first week of each month we will review the list, and make any trades necessary to get the portfolio to match the list. Every week we will examine the portfolio's performance against the S&P 500 and Dow Jones Industrial Average, and reinvest any dividends. The list of defensive stocks is made by following modernized Benjamin Graham strategies, and PE Ratio is calculated using an average of the previous 5 years' earnings per share (EPS).
We have decided to provide the list of Defensive Low PE stocks on a weekly basis. The portfolio will continue to be rebalanced once a month, but the actual list will be posted every week.
Here is this week's list of Defensive Low PE stocks:
| TOA | TECHNICAL OLYMPIC |
| SPF | STANDARD PACIFIC |
| OFG | ORIENTAL FINANCIAL |
| MHO | M/I HOMES, INC. |
| MDC | M.D.C. HOLDINGS, INC |
| ASH | ASHLAND INC |
| HOV | HOVNANIAN ENTERPRISE |
| DLX | DELUXE CORPORATION |
| FBP | FIRST BANCORP |
| CTX | CENTEX CORP |
| OSG | OVERSEAS SHIPHOLDING |
| STTX | STEEL TECHNOLOGIES |
| KBH | KB HOME |
| RYL | RYLAND GROUP, INC |
| MTH | MERITAGE HOMES CORP |
There were a number of transaction this time as we updated our formulas and reinvested some dividends.
This portfolio outperformed the Dow and S&P500 indexes during the period and has done so overall.
The snapshot:
| Ticker | Total Cost | Current Value | % Gain/Loss |
| ASH | $7,532.50 | $7,918.90 | 5.13% |
| CTX | $7,578.90 | $7,569.45 | -0.12% |
| DLX | $7,576.20 | $7,567.05 | -0.12% |
| FBP | $7,784.35 | $7,776.30 | -0.10% |
| HOV | $7,509.60 | $7,499.10 | -0.14% |
| KBH | $6,615.98 | $8,038.25 | 21.50% |
| MDC | $6,581.70 | $8,484.79 | 28.91% |
| MHO | $7,767.45 | $7,757.20 | -0.13% |
| MTH | $7,638.40 | $7,628.80 | -0.13% |
| OFG | $7,772.00 | $7,760.40 | -0.15% |
| OSG | $7,445.00 | $7,435.00 | -0.13% |
| RYL | $6,454.10 | $8,687.28 | 34.60% |
| SPF | $6,534.41 | $7,493.59 | 14.68% |
| STTX | $7,799.40 | $7,791.00 | -0.11% |
| TOA | $7,808.50 | $7,800.45 | -0.10% |
| Cash | $209.78 | ||
| Realized | $10,613.48 | ||
| Total | $100,000.00 | $117,417.34 | 17.42% |
Performance:
| 10/27/06 | 12/15/06 | Change | Overall | |
| S&P | 1389.08 | 1425.49 | 2.62% | 12.08% |
| Dow | 12163.66 | 12416.76 | 2.08% | 11.62% |
| Portfolio | 110121.12 | 117417.34 | 6.63% | 17.42% |
Neither of us holds a position in any of these stocks. Please review our disclaimer and Our Methods.
The defensive low PE portfolio consisted almost entirely of homebuilders. What has the return been for the year? I guess there is some sort of lesson here regarding the need for diversification. Also, has the portfolio changed now that the homebuilders no longer have earnings?
# Posted by: at September 29, 2007 12:38 AM