Up for a challenge? I have a little game that I like to play called the $99 Portfolio. The rules are pretty simple. Scour the stock listings and assemble a portfolio where a single share in each company would add up to roughly $99.
Yes, I know. In the real world, you would get killed on broker commissions for buying a handful of stocks in single-share lots. This is more of a mental exercise. Some folks do the paper's crossword puzzle in the morning. I'd rather play games in the financial section.
To make things interesting -- and to avoid a portfolio consisting of 99 different penny stocks -- let's tack on a new rule here. You're only allowed to choose six stocks. No more. No less.
Do you want to diversify across different sectors? Do you want to buy companies in all sizes to spread out your market cap concentration? I'll leave those questions up to you for your playing enjoyment, but I'll show you how my latest try on Tuesday played itself out.
The beauty of this game is that it's new every day, because prices change every day. Try it. Just once. I think you'll like the personalized weighing process. Now, on to my latest $99 portfolio, with Tuesday's closing prices.
Akamai
In the online world, where speed is everything, Akamai mans the accelerator pedal of choice. By far the niche leader, the content-delivery specialist speeds up everything from your iPod download to your Windows update through its global network of more than 14,000 servers that mirror content and website pages. More than 1,700 major corporations that need to make sure their website visitors are being served -- and served well -- have turned to Akamai. The results have been nothing short of breathtaking. This past quarter, Akamai saw earnings soar by 130% on a 27% top-line spurt.
Netflix
I've owned this company since 2002. I've been through the feast, and I was tested through the famine. Thankfully, we're feasting again. The DVD-rental specialist is profitable and wildly popular. Over the summer, it had amassed 3.2 million subscribers to its convenient and efficient mail-order disc-delivery service. With its largest competitor backpedaling and its biggest threat wasting time on the sidelines, Netflix should continue to grow briskly and reward its investors as it expands into other media delivery options and ramps up its advertising efforts.
Marvel Entertainment
I've been a fan of Marvel for years, although I had my bearish concerns four months ago. With the company embarking on a risky self-financed movie deal and guidance that called for flat earnings growth this year on a dip in sales, I was worried. Now that the shares have dipped nearly 20% despite a likely recovery, it's time to get back on the bandwagon.
You're probably familiar with the company's comic book heroes -- Spider-Man, The Incredible Hulk, X-Men, The Fantastic 4? The company has awakened in recent years by dusting off these proven properties and licensing them out to major movie studios. Marvel is a smarter company now. I'm starting to believe it really can pull off its self-produced slate of films. Of course, this will bring greater financial risk, but also the promise of greater returns.
CNET Networks
Online content sites are back in style, and that's a win-win situation for the company behind such popular sites as News.com, Download.com, and GameSpot. Either the company gets acquired at a respectable premium, or it takes advantage of its growing popularity and benefits from advertisers flocking to the Internet as the perfect sponsorship platform.
aQuantive
Speaking of online advertising, I'd have to rename this game the $300 portfolio if I wanted to buy a single share in the leader in online advertising. However, through aQuantive, I can take a more compelling approach. This company is a one-stop new media shop. It does it all when it comes to interactive marketing, and that's finding companies coming to aQuantive to do everything from coordinating their online advertising strategies to creating a sticky online presence. The company has been busy acquiring smaller niche players. So the huge 177% revenue uptick this past quarter clearly wasn't organic. Still, the company is on a tear and looking to snag an even bigger market share slice in a pie that continues to get bigger every passing quarter.
Sirius Satellite Radio
Yes, Sirius is risky. With a market cap of $8.5 billion, one can argue that the stock isn't exactly cheap, either. Still, I had $6.38 left to splurge on my $99 shopping spree, and I'm hoping someone will spot me the four pennies to make this experiment complete. Sirius started the month with 2.17 million subscribers. It expects to close out the year with 3 million avid radio buffs that crave the provider's rich digital stations. No, the company isn't as big as XM Satellite Radio
| 10/11/05 | |
|---|---|
| Akamai | $15.92 |
| Netflix | $28.21 |
| Marvel Entertainment | $16.85 |
| Sirius Satellite Radio | $6.42 |
| CNET Networks | $13.18 |
| aQuantive | $18.46 |
| TOTAL | $99.04 |
Ready to play? If you need some inspiration, I should point out that Akamai and CNET were recommended in our Motley Fool Rule Breakers newsletter earlier this year. It's a great source for young growth stock ideas. As a bonus, the average pick has totally trounced the market. You can check out the premium research service for free as part of a 30-day trial subscription.
Still want to play? Go ahead. Then let me know what your $99 portfolio looks like. I'll be back next week to pick apart some of the more interesting entries.
Longtime Fool contributor Rick Munarriz owns shares of Netflix and Akamai. He is a member of the Rule Breakers analytical team, seeking out the next great growth stock early in its stage of defiance. Netflix and Marvel are Motley Fool Stock Advisor recommendations. The Motley Fool isinvestors writing for investors.
