March Changes to SSR Portfolio


We have posted our monthly changes to the SSR tracking portfolio. For more information on this month’s deletion and addition, read the March SSR Monthly Report.

February Market Recap

The momentum of U.S. stocks that took hold in the aftermath of the November election continued onward in February. Through Friday’s close, the iShares DJ U.S. ETF (IYY) is up 6.0% for the year after gaining 3.9% month-to-date. This is the strongest start to a year since 2013. A blend of strong corporate earnings, generally positive economic data and promises from President Trump of an upcoming “phenomenal” tax plan kept investors bidding equity prices higher. At one point this month, the Dow Jones industrial average, S&P 500 and NASDAQ Composite each had reached new intraday highs in six consecutive trading days, something that hasn’t occurred in 25 years.

Through February 24, the SSR tracking portfolio slightly lagged the benchmark, gaining 3.6% for the month. The month-to-date gain in the SSR tracking portfolio is its best February performance in two years when the portfolio was up 4.9%.

As of the February 24 close, 28 of the 36 SSR stocks posted a monthly gain. Group 2 was once again the home of the strongest stock for the month. However, Group 1 had the strongest stocks of any group this month, on average, and none of the stocks in Group 1 are down thus far for the month. Group 3 saw five of its stocks fall for the month, including the portfolio’s weakest holding.

In a month where many stocks posted gains, it is interesting that Group 3 housed four of the seven stocks in the portfolio that were down for the month. The goal of the SSR portfolio is to help investors build a diversified portfolio across investment styles (i.e., growth versus momentum) as well as sectors and industries in an attempt to lower the overall risk of the portfolio while still outperforming the market. From that standpoint, it is perhaps not surprising that some groups will lag others month-to-month and over longer time periods. This month’s Portfolio Corner delves deeper into to the discussion of diversification.

Earnings Season Update

This week, five more companies in the SSR tracking portfolio reported results from the fourth calendar quarter of 2016. Through the end of this week, 32 of the 36 stocks in the SSR portfolio have reported their quarterly results for the current earnings season. Twenty-two have reported positive earnings surprises while two others have reported results that were in line with analyst expectations. The remaining eight companies reported earnings that fell short of estimates. Thus far for this earnings season, the median earnings surprise for the SSR companies is +2.0%.

SSR Portfolio

For 2017 year to date, the SSR tracking portfolio has gained 5.9% through the close on February 24, while the iShares DJ U.S. ETF is up 6.0%. Since inception, the iShares DJ U.S. ETF has gained 189.5%, while the SSR tracking portfolio has gained 237.0%.

Wayne A. Thorp, CFA
Senior Financial Analyst, AAII
SSR Investment Committee

Click here for news on the current SSR holdings and weekly performance data.

The Stock Superstars Report (SSR) publication was developed to educate individual investors on how to build a stock portfolio using a mix of strategies. The SSR is designed to provide all the information you need to manage a stock portfolio as well as to teach you about timely investment principles relating to the SSR portfolio and stock investing in general.


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