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The "World's Greatest Growth Portfolio" Continues to Outperform

By Brian Stoffel - Apr 2, 2013 at 4:30PM

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Find out which companies had a great March, and which stumbled.

Over a year ago, I attempted to help out family and friends by creating what I considered an ideal growth portfolio.

If, during 2012, you had invested in the S&P 500, your investment would have returned 15.9%, after factoring in dividends. That's actually outstanding. And yet, had you been invested in the "World's Greatest Growth Portfolio," you would have trounced the S&P 500, earning a 26.5% return on your investment.

Before 2013 began, I decided to review all of the companies to see which ones still made the cut and which didn't.

The chart below shows how the 2013 portfolio has performed so far. Taken as a whole, The World's Greatest Growth Portfolio has returned 28% since inception, besting the S&P 500 by 2 percentage points. Click on any company, and you can read about why it was selected for the portfolio.

Read on and you'll see what's happened over the past month to narrow the gap between the market and this portfolio.

 $1,000.00

Core

Company

Allocation

Jan. 1 balance

Current balance

Change

Baidu 

11.5%

 $115.00

 $100.63

(12.5%)

Google 

11.5%

 $115.00

 $129.03

12.2%

Amazon.com 

11.5%

 $115.00

 $122.13

6.2%

Whole Foods 

11.5%

 $115.00

 $109.71

(4.6%)

Tier One

Starbucks 

7.5%

 $75.25

 $80.14

6.5%

Apple 

7.5%

 $75.25

 $62.98

(16.3%)

Intuitive Surgical

7.5%

 $75.25

 $75.33

0.1%

IPG Photonics 

7.5%

 $75.25

 $75.02

(0.3%)

Tier Two

3D Systems 

5%

 $50.00

 $45.35

(9.3%)

LinkedIn

5%

 $50.00

 $76.65

53.3%

Stratasys 

5%

 $50.00

 $46.35

(7.3%)

Westport Innovations 

5%

 $50.00

 $55.25

10.5%

lululemon athletica 

5%

 $50.00

 $40.90

(18.2%)

 

       

Year-to-date

 

 $1,000.00

 $1,019.47

1.2%

Returns Since Inception

     

28%

Source: Fool.com.

Two outperformers
Of the 13 stocks in this portfolio, two stood out as outperformers, and helped keep the portfolio flat since last month. Shares of fiber-optic laser maker IPG Photonics (IPGP -1.00%) were up 12% during the month of March. The biggest cause for this move was the company's announcement that it would be acquiring Mobius Photonics.

The move is important because Mobius is a specialist in UV fiber lasers that help make semiconductors and solar hybrid panels. As IPG is already the leader in fiber-optic lasers, it believes integrating Mobius' technology into the company will allow it to offer UV lasers for a lower cost than the competition.

The second big outperformer was Stratasys (SSYS -1.39%), one of the leaders of the 3-D printing revolution. The company saw shares rise 17% last month, primarily due to a positive earnings report.  For the fourth quarter of 2012, revenue at the company rose 30%, while net income grew 40%. Though it was tough to tell  how much of the growth was organic, and how much was due to the merger with Objet, investors were clearly pleased by the news.

Three underperformers
What was good news for Stratasys investors, however, didn't translate the same way for investors in fellow 3-D printing company 3D Systems (DDD -1.44%). It doesn't help that in February, 3D released earnings that disappointed Wall Street. And many apparently assumed that with Stratasys performing so well, it meant 3D was losing market share.

Personally, I don't completely buy that argument, as there's no telling how big 3-D printing will be in the future, and there's more than enough room for two winners in the space.

Next on the list is lululemon athletica (LULU -0.44%). The high-end sportswear company that got its start focusing on quality women's clothing for yoga was down 7% in March. The big story here has to do with a product recall. Lulu's line of clothes has always been noted for accentuating a flattering figure, but the company's black luon yoga pants took it a step too far. It appears many of them are pretty much see-through, and the company is recalling the pants.

Finally, we have Intuitive Surgical (ISRG 1.16%). I've highlighted the stock's dive already; it can be broken down into three simple events. First, a report came out questioning the effectiveness of the company's da Vinci robot in performing hysterectomies. Later, the FDA announced it was investigating an uptick in reported complications and complaints of insufficient training for doctors. And finally, the president of the American Congress of Obstetricians and Gynecologists came out questioning whether the cost of a da Vinci surgery was warranted given its results.

Is Intuitive about to face a backlash?
For the time being, I'm taking a wait-and-see approach with Intuitive. The report questioning Intuitive's effectiveness was fairly shallow in tracking long-term recovery time, and the FDA's investigation may relate to nothing more than a change in how the company reports surgery-related incidents.

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Stocks Mentioned

Intuitive Surgical, Inc. Stock Quote
Intuitive Surgical, Inc.
ISRG
$221.61 (1.16%) $2.54
Lululemon Athletica Inc. Stock Quote
Lululemon Athletica Inc.
LULU
$272.84 (-0.44%) $-1.20
3D Systems Corporation Stock Quote
3D Systems Corporation
DDD
$10.25 (-1.44%) $0.15
Stratasys Ltd. Stock Quote
Stratasys Ltd.
SSYS
$18.41 (-1.39%) $0.26
IPG Photonics Corporation Stock Quote
IPG Photonics Corporation
IPGP
$99.09 (-1.00%) $-1.00

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

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