A Look Back at 7 Months of Outperformance

This article is part of our Rising Star Portfolios series.

It's useful as an investor to examine your portfolio at intervals to assess your performance -- where you've gone right or wrong and where you can improve. That's what I'm doing today with my Special Situations portfolio, part of the Rising Star Portfolios series at The Motley Fool.

Below are my real-money buys in order of purchase, which you can see here. I've compared my performance against an equal dollar purchase of the S&P 500 on the same date as my actual buys. Such a methodology provides a "purer" look at performance and eliminates the drag of having a wad of cash sitting in your portfolio.

Source: Yahoo! Finance as of May 26.

So the overall portfolio is up about 12.6% against a comparable gain of around 3% for the S&P. That's an attractive outperformance over just a seven-month period. As you can see, much of the gain has to do with the meteoric rise in Red Robin in the past week or so. But I expect such lumpiness in a special situations portfolio; catalysts develop at unequal speeds and to the beat of their own drummer.

Sabra was my first buy, and perhaps not surprisingly for a REIT, its price hasn't moved much. But the company has been busy acquiring properties since my purchase, and I'm expecting more as the company expands its real-estate portfolio away from its heavy reliance on the properties of former parent Sun Healthcare (Nasdaq: SUNH).

Red Robin shares have done well in the past week, following the company's first-quarter earnings report. The company cut costs and that showed up in the profit column, which more than doubled Wall Street's expectations. Red Robin will have to keep up this kind of performance to maintain this share price.

I remain confident in my selection of Madison Square Garden. With trophy assets such as the New York Knicks and New York Rangers and a valuable media network, this company has enviable properties. And publicly traded sports franchises have a habit of not remaining public for long. Meanwhile, the media business gushes cash while we wait.

Grupo PRISA shares have been hit hard by the ongoing Euro-malaise. But the company still has many attractive features despite its reliance on Spain. The B shares have that gaudy dividend, as I explained in my original buy rec, and the company is committed to deleveraging. PRISA also has exposure to fast-growing Latin American markets.

Ascent Media has a lot to like: a recurring subscription business model, growing cash flow, and capital allocator par excellence John Malone behind the scenes. The company recently acquired a home security business and is now working to refinance it. Old financials are absolutely useless, and the most recent financials are somewhat in disarray as the company finishes exiting its old businesses. All that spells opportunity for this small cap.

Seaspan is my most recent choice, and like Ascent, I've doubled up on it. The story at Seaspan is one of massive cash generation, which should allow the company to rapidly escalate its payout. While shares are down now, I see them trading significantly higher in the future as the company pursues its progressive dividend policy. I explain the rest of the investment thesis here.

Interested in these stocks or have another special situation to share? Join me on my discussion board and follow me on Twitter (@TMFRoyal).

This article is part of our Rising Star Portfolios series, where we give some of our most promising stock analysts cold, hard cash to manage on the Fool's behalf. We'd like you to track our performance and benefit from these real-money, real-time free stock picks. See all of our Rising Star analysts (and their portfolios) here.