Investcraft – The Art of Investing

I have provided some updates to my 2010 stock portfolio. Before I list my holdings, I’d like to make a few comments about the general theme of my portfolio, my additions, subtractions, and the reasoning behind these decisions.

Additions: THC, HMA, FNGN, SNV, UBS
Subtractions: BZH, MGM, AMAT, SLM, TOL, YHOO

My reasoning for selling homebuilders is simply that it may take some time for the real estate market to bounce back. Homebuilders have had a nice run-up and I simply sold because I took some profit on BZH and I felt TOL was underperforming. As for MGM, I already have LVS so owning MGM was kind of redundant. Additionally, I believe LVS will outperform MGM due to it’s stronger balance sheet. Still, I like MGM and if it slips back down to $10, I may buy it back again. I sold YHOO and AMAT because their business and stock price seemed to be stagnating. There’s no near term or even any real long term catalyst for either of these stocks except to follow the general market. There are better opportunities out there to pursue.

I bought THC and HMA because it made sense to get a piece of the healthcare sector. With Obama’s health care proposal becoming law, it makes sense to invest in the growing healthcare business. I think THC and HMA are both value plays in the sector. FNGN recently went IPO and is a growth play and a long-term winner, I believe. SNV is another beaten-down bank that is on a road to recovery. If they continue to turn things around, the stock has a lot of upside and a very large short position to boot. All the negative news seems to be out for UBS. They’ve had a run of really bad publicity in the past 2 years, but overall, this is still a very financially strong company with an attractive valuation.

Overall, my portfolio is still heavily weighted towards financial stocks — regional banks, large banks, and financial services. There are several bank stocks I want to get into but am just looking for a good entry point. These includes stocks like Wells Fargo (NYSE: WFC), JP Morgan Chase (NYSE: JPM), Goldman Sachs (NYSE: GS). But all of them are hardly bargains now. They’ve performed exceptionally well and is well-priced. However, I think if you look harder, there are still several smaller banks that are very much bargains. In particular, I like Intervest Bancorp (NASDAQ: IBCA). I own them in my portfolio but may increase my stake in them sometime in the near future.

Below is my updated 2010 portfolio:

AACFX – AIM CHINA CLASS A – LT
AIB – Allied Irish Banks, p.l.c. Comm – LT
AKAM – Akamai Technologies, Inc. – LT
ALSC – Alliance Semiconductor – ST
ARUN – Aruba Networks, Inc. – LT
BAC – Bank of America Corporation – LT
BPOPP – Banco Popular Preferred – LT
C – Citigroup, Inc. – LT
CHINA – CDC Corporation – LT
CPBY – China Information Security Tech – LT
CSKI – China Sky One Medical, Inc. – LT
EJ – E-House (China) Holdings – LT
ETFC – E*TRADE Financial Corporation – LT
FNGN – Financial Engines, Inc. – LT
HBAN – Huntington Bancshares – LT
HMA – Health Management Associates – LT
IARAX – AIM REAL ESTATE FUND CLASS A – LT
IBCA – Intervest Bancshares Corp. – ST
JGBO – JIANGBO PHARMACEUTCL – ST
KEY – KeyCorp Common Stock – LT
LVS – Las Vegas Sands Corp. – LT
NYVTX – DAVIS NEW YORK VENTURE FUND A – LT
OKSB – Southwest Bancorp, Inc. – LT
PNC – PNC Financial Services Group – LT
RAS – RAIT Financial Trust – ST
RF – Regions Financial Corporation – LT
RODM – Rodman & Renshaw Capital Group – ST
SKBI – Skystar Bio-Pharmaceutical – ST
SKS – Saks Incorporated Common Stock – LT
SNV – Synovus Financial Corporation – LT
SUSQ – Susquehanna Bancshares, Inc. – LT
TBBK – The Bancorp, Inc. – LT
THC – Tenet Healthcare Corporation – LT
UBS – UBS AG Common Stock – LT
WFD – Westfield Financial, Inc. – LT