Last November, I announced my intention to create a portfolio of 10 companies that investors had effectively thrown away and given up on, in the hope of showing that deep-value investing and contrarian thinking can actually be a successful investing method. I dubbed this the "One Person's Trash Is Another Person's Treasure" portfolio, and over a 10-week span, I highlighted companies that I thought fit this bill and could drastically outperform the benchmark S&P 500 over the coming 12 months. If you're interested in the reasoning behind why I chose these companies, then I encourage you to review my synopsis of each portfolio selection:

Now let's get to the portfolio and see how it fared this week:

Company

Cost Basis

Shares

Total Value

Return

Exelon

$31.25

31.68

$884.82

(10.6%)

QLogic

$11.46

86.39

$972.75

(1.7%)

Dendreon

$5.97

165.82

$543.89

(45.1%)

American Eagle Outfitters

$15.49

63.91

$909.44

(8.1%)

Staples

$13.48

73.44

$1,147.13

15.9%

Arkansas Best

$10.83

91.41

$3,079.60

211.1%

Arch Coal

$7.03

140.83

$587.26

(40.7%)

Skullcandy

$6.71

147.54

$874.91

(11.6%)

Orange

$11.64

85.05

$1,039.31

5%

Xerox

$8.16

121.32

$1,425.51

44%

Cash

    

$28.28

  

Dividends receivable

    

$164.16

  

Total commission

    

($100.00)

  

Original investment

    

$10,000.00

  

Total portfolio value

    

$11,657.06

16.6%

S&P 500 performance

      

20.6%

Performance relative to S&P 500

      

(4%)

Source: Yahoo! Finance, author's calculations, American Eagle Outfitters replaced Dell, which was taken private in October.

This week's winner
Despite no company-specific news, audio accessories maker Skullcandy (SKUL) topped the list of gainers this week with an 8.6% advance. One reason in particular that Skullcandy investors (of which I'm one) should be excited is the company's cost-cutting and product revamp efforts, which I suspect will pay off this holiday season with a moderate profit. With a new CEO at the helm who understands how to appeal to a younger crowd and a renewed focus on the approximately $30 to $50 niche audio product, I project Skullcandy could have ample room to run higher from here.

This week's loser
On the other end of the spectrum was volatile coal miner Arch Coal (NYSE: ACI), which fell 3.2% on the week despite paying out a $0.03 quarterly dividend to shareholders late last week. The move lower also comes despite a reaffirmation from research firm Sterne Agee of the stock at a buy rating and a $7 price target. Furthermore, Arch announced the successful refinancing of its senior credit facility, term loan facility, and debt retirement that it had discussed recently. With the company now in a much better capital position and saving $10 million to $20 million annually, I feel Arch could surprise investors in 2014.

Also in the news...
In addition to the reaffirmation of Arch's buy rating above, office supply superstore Staples (SPLS) on Wednesday was upgraded by research service Zacks to a neutral rating from underperform and had a $16 price target placed on the company. The upgrade was precipitated by Staples' recent in-line earnings report, which reversed a series of recent earnings misses. Zacks does, however, warn that a slowdown in consumer spending and weak top-line growth are negatives that make it predominantly want to stick to the sidelines. I'd certainly take this upgrade with a grain of salt considering that Zacks has been upgrade and downgrade happy with Staples in the past, paying little credence to its long-term outlook. I feel with Office Depot ready to commence the combination of it and OfficeMax's stores, you can likely expect Staples to pick up displaced office supply store customers in 2014, which should help its domestic top-line growth.

Teen apparel retailer American Eagle Outfitters (AEO 1.08%) went ex-dividend yesterday, shedding $0.125 per share in anticipation of paying out this amount to shareholders on Dec. 30, 2013. American Eagle Outfitters' investors have suffered through their fair share of growth struggles recently, but few apparel retailers have a better stranglehold on their inventory or pricing than American Eagle. With a dividend yield in excess of 3% and the perfect price point to attract multiple tiers of shoppers, I believe American Eagle could become a very popular investment in 2014.

Finally, printing and IT-service specialist Xerox (XRX) jumped better than 5% on the week after announcing yesterday that 3D Systems would be acquiring part of its product design, engineering, and chemistry operations for $32.5 million in cash. Also, under the terms of the deal, 3D Systems will add 100 current Xerox employees to its staff. Consider this another attempt by Xerox to rid itself of non-core assets and to instead position itself for recurring revenue gains from long-term IT-service-based contracts.

We can do better
Despite the S&P 500 exploding higher yesterday on news of the FOMC's long-awaited QE3 tapering announcement, this portfolio of contrarian and deep-value stocks managed to outperform the broad index for the week. Arkansas Best and Xerox continue to lead the charge higher with struggling biopharmaceutical Dendreon beginning to show signs of life. Our one-year experiment is beginning to wind down, but I believe there's still plenty of time for this portfolio to catch up and pass the S&P 500 for the trailing year.

Check back next week for the latest update on this portfolio and its 10 components.