Just before New Year's, a group of family and friends asked me to give them advice on building out the ideal growth portfolio. I split my picks into three groups based on risk: core investments, tier one investments, and riskier tier two investments.
Not in my wildest dreams could I have predicted the type of success witnessed thus far. Below, I share with you how the hypothetical portfolio is doing, as well as offer up my three best buys from the group right now.
Read all the way to the end, and I'll throw in access to a special free report about the best growth idea the Fool has right now.
|
Core |
||||
|---|---|---|---|---|
|
Company |
Allocation |
Jan. 1 Balance |
March 3 Balance |
Change |
| Intuitive Surgical | 11.5% | $115.00 | $136.16 | 18.4% |
|
Google |
11.5% | $115.00 | $114.43 | (0.5%) |
| Amazon.com | 11.5% | $115.00 | $132.60 | 15.3% |
| Whole Foods | 11.5% | $115.00 | $137.54 | 19.6% |
|
Tier One |
||||
|
lululemon athletica |
7.5% | $75.25 | $123.49 | 64.1% |
|
Apple |
7.5% | $75.25 | $116.86 | 55.3% |
|
Westport Innovations |
7.5% | $75.25 | $91.73 | 21.9% |
| IPG Photonics | 7.5% | $75.25 | $119.57 | 58.9% |
|
Tier Two |
||||
| Baidu | 5.0% | $50.00 | $63.10 | 26.2% |
| Zipcar | 5.0% | $50.00 | $51.85 | 3.7% |
| Stratasys | 5.0% | $50.00 | $62.05 | 24.1% |
| MAKO Surgical | 5.0% | $50.00 | $83.20 | 66.4% |
|
Solazyme |
5.0% | $50.00 | $67.35 | 34.7% |
| Total | 100% | $1,000.00 | $1,299.92 | 30% |
Source: Fool.com.
To put these results in context, the S&P 500 has returned 13% over the same time period -- including dividends reinvested. Things can change on a moment's notice when it comes to the market, but so far, this growth portfolio is absolutely kicking the market's rear-end.
As I wrote in a previous article: "Much of that outperformance can be traced back to the performance of Apple over the past month. With the successful launch of the new iPad and the announcement of both a dividend and share buyback, the company's stock was up 10% in March alone."
Another stock absolutely blowing away analysts has been lululemon athletica. The yoga retailer is up 64% on the year, but I don't think that's the most impressive stat coming from the company. According to its latest earnings release, same-store sales were up an astounding 26% during the fourth quarter of 2011.
Three best buys for right now
Though both of these companies have certainly performed well -- and will probably continue to do so -- they aren't on my list of best buys for your money right now.
The first stock garnering that honor is Westport Innovations. The engineer of natural gas engines is trading about 20% lower since hitting a high close to $50 in late March. I'll be the first to admit the stock has gone on quite a run lately, up about 50% over the past year.
The recent swoon is one part larger market movements, one part loss of momentum, and one part worry over competition. The first two are short-term issues that shouldn't concern a Foolish investor. And, as I've talked about previously, Cummins' proposed 15-liter natural gas engine shouldn't be a big threat to Westport, as Westport's own version should be far more powerful than what Cummins will be offering.
Next on my list of buys is Solazyme. For investors who feel like they may have missed out after yesterday's 12% pop, fear not. The company announced that it had officially entered a joint venture with Bunge to operate a factory producing 100,000 metric tons of tailored oils per year. It's a big step for the company as they hope to scale up.
I actually found the pop a little odd, as the company had laid out the framework for the JV long ago; I thought the market had already priced the move into the stock. But rest assured, with three different revenue streams available, and the company fulfilling all of its fuel orders for the likes of the U.S. Navy, there's still lots of room for this stock to run.
Finally, I believe Google is a solid buy at today's prices. The market's been on quite a run, and Google may be one of the safest places to sock your money for the long run in this environment. While the greater market is up 13% this year, Google is basically flat.
It's odd, too, as the company has shown remarkable strength since Larry Page took the reins. Revenue was up 30% last year and earnings were up 14%. My guess is that investors are worried about spending at the company, but I have faith that Page is laying the foundation for continued dominance within the tech field.
Our chief rule breaker's favorite
The Fool has a name for the type of investing that I'm practicing here: rule breaking, or investing in innovative companies that are changing our world. Recently, Fool co-founder and chief rule breaker David Gardner sat down to ponder which stock holds the most promise over the coming years.
You can find out which company he picked by reading our latest report: "Discover the Next Rule-Breaking Multibagger." I'll give you a hint and tell you that the stock is actually in the portfolio I revealed above. To find out which one it is, you'll have to get your copy today. It's absolutely free!
