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Motley Fool 100 Update: What's In and What's Out

By Tim Hanson – Updated Jan 28, 2020 at 7:50AM

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The Motley Fool co-founders Tom and David Gardner. Image source: The Motley Fool.

It's been an interesting start to the year for the stock market writ large and for our Motley Fool 100 Index specifically. A market-cap-weighted index that tracks the performance of The Motley Fool's 100 largest investing ideas, the Fool 100 was up 2.04% in the first quarter of 2018 compared to a 1.58% decline for the S&P 500. That's good, but we strive for better. The Fool 100's outperformance narrowed toward the end of the quarter due to declines in the value of big technology company stocks such as Facebook and Alphabet, which represent a hefty percentage of the Fool 100's composition.

Having said that, we'd like to think this recent performance lends credibility to the simple idea that powers the Fool 100: We'd rather own all high-quality businesses than any low-quality businesses.

To that end, we reconstitute the Fool 100 quarterly to make sure the index reflects our company's latest and greatest thinking on the stocks our analysts follow. This quarter, six companies came into the index and six went out.

Leaving the index were commercial truck manufacturer Paccar (PCAR -0.97%), industrial engineering company Emerson Electric (EMR -0.95%), biotech BioMarin Pharmaceutical (BMRN -3.16%), aircraft market Textron (TXT -1.80%), aircraft parts maker Transdigm Group (TDG -1.68%), and oil pipeline and storage firm Magellan Midstream (MMP -1.64%). Paccar and Emerson both left the Fool universe after our analysts issued sell recommendations on the stock, while BioMarin, Textron, Transdigm, and Magellan became too small to qualify for the Fool 100.

Replacing these stocks were open-source tech giant Red Hat (RHT), consumer finance lender Discover Financial Services (DFS -2.86%), veterinary healthcare equipment provider IDEXX Laboratories (IDXX -0.89%), pipeline operator Spectra Energy (formerly NYSE: SEP), cyber security specialist Palo Alto Networks (PANW 0.99%), and paper and packaging maker WestRock (WRK -1.65%). Red Hat, Discover, and Spectra entered the Fool 100 thanks to new buy recommendations from our analysts, while IDEXX, Palto Alto, and WestRock grew large enough to qualify for inclusion in our top 100 ideas.

Those changes, though, were mostly on the margin, and the Fool 100 remained substantially the same, with low turnover, relatively more exposure to the technology and consumer discretionary sectors than the broader market, and recognizable names making up its top 10 constituents.

Motley Fool 100 Top 10 Constituents

Apple (AAPL 0.23%)

8.61%

Alphabet (GOOG -0.36%)

7.39%

Amazon (AMZN 1.20%)

6.92%

Microsoft (MSFT -0.20%)

6.78%

Facebook (META -2.88%)

5.02%

Berkshire Hathaway (BRK.B -1.29%)

4.79%

Johnson & Johnson (JNJ -0.61%)

3.34%

Visa (V -1.83%)

2.67%

Intel (INTC -2.00%)

2.16%

UnitedHealth (UNH -1.02%)

2.15%

As of April 2, 2018.

To learn more about the Motley Fool 100 index, including all of the Fool picks that make up its 100 constituents, visit the Fool 100 website at www.fool100.com.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Teresa Kersten is an employee of LinkedIn and is a member of The Motley Fool's board of directors. LinkedIn is owned by Microsoft. Tim Hanson owns shares of Alphabet (C shares), Amazon, Apple, Berkshire Hathaway (B shares), Facebook, Microsoft, and Visa. The Motley Fool owns shares of and recommends Alphabet (C shares), Amazon, Apple, Berkshire Hathaway (B shares), Facebook, Idexx Laboratories, Johnson & Johnson, TransDigm Group, and Visa. The Motley Fool owns shares of Paccar and has the following options: long January 2020 $150 calls on Apple and short January 2020 $155 calls on Apple. The Motley Fool recommends BioMarin Pharmaceutical, Intel, Magellan Midstream Partners, Palo Alto Networks, Spectra Energy Partners, Textron, UnitedHealth Group, and WestRock. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Berkshire Hathaway Inc. Stock Quote
Berkshire Hathaway Inc.
BRK.B
$264.32 (-1.29%) $-3.45
Apple Inc. Stock Quote
Apple Inc.
AAPL
$150.77 (0.23%) $0.34
Microsoft Corporation Stock Quote
Microsoft Corporation
MSFT
$237.45 (-0.20%) $0.47
Intel Corporation Stock Quote
Intel Corporation
INTC
$26.97 (-2.00%) $0.55
Johnson & Johnson Stock Quote
Johnson & Johnson
JNJ
$165.70 (-0.61%) $-1.02
Amazon.com, Inc. Stock Quote
Amazon.com, Inc.
AMZN
$115.15 (1.20%) $1.37
Red Hat, Inc. Stock Quote
Red Hat, Inc.
RHT
BioMarin Pharmaceutical Inc. Stock Quote
BioMarin Pharmaceutical Inc.
BMRN
$82.16 (-3.16%) $-2.68
Emerson Electric Co. Stock Quote
Emerson Electric Co.
EMR
$73.14 (-0.95%) $0.70
Meta Platforms, Inc. Stock Quote
Meta Platforms, Inc.
META
$136.37 (-2.88%) $-4.04
UnitedHealth Group Incorporated Stock Quote
UnitedHealth Group Incorporated
UNH
$508.36 (-1.02%) $-5.25
Visa Inc. Stock Quote
Visa Inc.
V
$180.59 (-1.83%) $-3.37
Discover Financial Services Stock Quote
Discover Financial Services
DFS
$91.05 (-2.86%) $-2.68
Textron Inc. Stock Quote
Textron Inc.
TXT
$58.36 (-1.80%) $-1.07
WestRock Company Stock Quote
WestRock Company
WRK
$31.57 (-1.65%) $0.53
IDEXX Laboratories, Inc. Stock Quote
IDEXX Laboratories, Inc.
IDXX
$331.22 (-0.89%) $-2.98
TransDigm Group Incorporated Stock Quote
TransDigm Group Incorporated
TDG
$531.44 (-1.68%) $-9.07
Magellan Midstream Partners, L.P. Stock Quote
Magellan Midstream Partners, L.P.
MMP
$45.69 (-1.64%) $0.76
PACCAR Inc Stock Quote
PACCAR Inc
PCAR
$83.00 (-0.97%) $0.81
Spectra Energy Partners Stock Quote
Spectra Energy Partners
SEP
Palo Alto Networks, Inc. Stock Quote
Palo Alto Networks, Inc.
PANW
$163.17 (0.99%) $1.60
Alphabet Inc. Stock Quote
Alphabet Inc.
GOOG
$98.81 (-0.36%) $0.36

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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