CS/SSL Stock Portfolio Up an Impressive 60%
March 20, 2006...As of February 1st when last Jo Ann reported on her model portfolio of compound semi (CS) and solid state lighting (SSL) industry stocks, the value of the portfolio had increased an impressive 43%. As of March 20th, that value figure has risen even further to 60%... a figure that any USA stock market follower would say is "huge and exciting news." To follow are the details of how the portfolio is performing.
When I first dived into this "model stock portfolio" experiment, my primary motivation was not profit... although that would be a nice bonus. The motivation was to prove to myself, colleagues, and friends that we'd truly hit bottom and that there was really no way to go but up. To do so, I needed to provide myself with some kind of tangible metric to track the awkward upward climb back into semiconductor industry prominence. I never expected that the overall progress of the portfolio would be regarded as "huge and exciting news," but that's what my broker says it is. And I believe him.
The challenge now is to leverage that "news" in some way... beyond these niche pages. If you represent any of the companies in the portfolio, give some thought as to how we might do that, collectively or individually. In order of their purchase (a process that began last May), the 13 companies included in the model portfolio and their Nasdaq trading symbols are: Emcore (EMKR), Cree (CREE), TriQuint (TQNT), Color Kinetics (CLRK), Anadigics (ANAD), JDS Uniphase (JDSU), Spire (SPIR), RF Micro Devices (RFMD), Kopin (KOPN), WJ Communications (WJCI), Vitesse (VTSS), Aixtron (AIXG), and AXT (AXTI).
As adequately pre-announced in these pages to satisfy any SEC concerns, I purchased 100 shares of each at what I felt was their rock bottom low. The selection was not based on just bargain-basement pricing. These were companies I knew, from experience, would be around for many years to come. I also respect these companies and their management for their past performance and have faith they'll continue to provide the kind of shareholder and customer value that indeed models the CS and SSL industries.
The purchase of Emcore stock was the easiest, not only because it was trading at only $3.63/share, but because I know Emcore better than any other company in our field. I consulted for Emcore for three years in the 1990s during both the telecom boom and early rollout of the SSL and multijunction solar cell industries. Taking a sabbatical from journalism to be their director of corporate communications proved to be a job that taught me more about the CS and SSL industries than any editor could ever imagine. The purchase of Cree and Color Kinetics's stocks were the most difficult decisions simply because both were already trading in double digits back in May of 2005. I'm not only a natural tightwad, I didn't have that much to "gamble" on this experiment. But who could resist Cree and CK? They were both born winners, and I've known both since their respective births.
The EMKR, CREE, and CLRK stocks have turned out to be the best performers in the portfolio. As of March 20th and this writing, Emcore has provided an "unrealized gain" of $870, Cree has added $770, and Color Kinetics has turned in a $669 gain. The total cost of the entire portfolio was $6,908 and today it's worth $10,038. That's an overall "unrealized gain" ("unrealized"... because not only is that the terminology required, but there's literally no way I'd cash these babies in now!) of $4,167.35. Take the gain and divide it by the cost, and you get the 60% increase in value.
Looking over the score sheet since their respective purchases, my EMKR stock has enjoyed a steady rise. Cree has had a bit of a mini-roller coaster ride and TQNT is finally enjoying a mild overall rise. CLRK has steadily risen, and ANAD is finally enjoying a nice steady rise, as has JDSU. SPIR is still riding their dramatic upswing from last summer. RFMD is steadily rising, and the only minus comes from KOPN which lost me a whole $7.95.
The final four in the portfolio, which were added later as their prices sank to irresistibly low buy-in levels, are probably the best indicators of how the overall CS-related (or rooted) industry really is recovering. At first, WJCI and VTSS's stock prices fell even further after I purchased them, but they're now both on the rise again. WJCI turned in a tidy $51 overall gain and VTSS $93 as of today. The final two, AIXG and AXTI, were the latest purchases when Aixtron's stock was $3.42/share. Despite recent news that Aixtron's has had to streamline operations, their branching out to the organic and innovative silicon industries is evidently viewed as sensible because their stock is trading today at $4.31. AXT underwent a major overhaul under the Phil Yin (formerly of Aixtron) and has managed to pull their stock up from $1.25/share (when I purchased it) to $3.42/share today. That's already netted me a tidy $212.05 gain. Kudos to both AIXG and AXTI's management teams for the turnaround.
What I read into the overall performance of my model portfolio is that things are indeed looking up. Finally. the biggest winners, in order of overall stock performance, are: Emcore, Cree, Color Kinetics, Anadigics, and Spire, who have collectively provided gains in the range of $870 to $421. They're followed by JDS Uniphase, RFMD, and AXT weighing in at the +$200 range. The rest of my baker's dozen (aka my "Lucky 13") contributed only single or double digits, except for Kopin, the only minus in the batch. But knowing KOPN, it'll be back up soon.
The overall performance of the portfolio says a lot for the management strategies of the three big winners and the perseverance of the other ten. For those struggling for prominence in their respective fields, take a close look at what Emcore, Cree, and CK have been doing over the past year. These three companies continue to pioneer the CS and SSL industries. These three are the best models I could point to as how to succeed in very tough businesses.
If you have questions about the solid state lighting and compound semiconductor industries or have news or views to share, I'm Jo Ann McDonald, Editor of LIGHTimes and CompoundSemi News.
Feel free to contact me directly, anytime. |
