After conducting the quarterly review of the Model Shadow Stock Portfolio, two stocks were removed from the tracking portfolio during regular trading hours on Monday, March 11.
However, the proceeds from these two sales, as well as the cash held in the portfolio, were not enough to invest an average position size amount in even one replacement stock. It is the policy of the Model Shadow Stock Portfolio not to underweight or overweight new positions. Instead, it is better to hold excess cash until there is enough to buy a new stock with a position size roughly equivalent to the average position size in the portfolio.
Sell Alerts
Aceto Corp. (ACET)
Aceto Corp. filed for Chapter 11 bankruptcy protection from its creditors. The company said it will sell its chemicals unit and Rising Pharmaceuticals unit in separate transactions, which will be supervised by bankruptcy courts in New York and New Jersey.
Seneca Foods Corp. (SENEA)
Seneca has been on earnings probation since it announced its first-quarter 2019 earnings on August 1, 2018. At that time, the company’s trailing 12-month earnings per share turned negative. On February 1, the company reported a quarterly loss—adjusted to account for discontinued operations—of $2.07 per share. If a Shadow Stock that is on earnings probation reports a subsequent quarterly loss, it is removed from the portfolio.
Next Monthly Update & Quarterly Review
The next monthly Model Portfolios Update will take place on Friday, March 15. On that day, the monthly Model Portfolios Update email will go out and the Model Portfolios area of AAII.com will be updated with new data and the portfolio changes outlined in this email.
The next quarterly review of the AAII Model Shadow Stock Portfolio will take place at the end of May 2019. Any changes to the portfolio will be announced at the time they are made in a special Model Portfolios Update email (sign up at www.aaii.com/email).
Get updates about the portfolio that has outperformed the market by 211.9%
since inception!
