Weekly Performance Review December 7th – 11th

Major indexes reached fresh record highs last week before pulling back to finish modestly lower, as stalled stimulus talks and the likelihood for a no-deal Brexit soured the mood.  The market appears to be largely focused on the prospects of a brighter outlook driven by vaccine rollouts, even as recent coronavirus trends continue to worsen and restrictions in activity are reimposed.  To this point, the S&P 500 has hit 30 new all-time highs in 2020, 17 of them recorded after the late-February pandemic-induced bear market, and four of them recorded in the last two weeks.  

While it may not have been a big week for the benchmarks (each finished the week less than 1% lower), our trades posted some nice returns.  Continue reading to find out how we did.



12-07-2020–BXP down 4.94%

Joe Biden’s tax plan would raise corporate taxes back to 28% and would more aggressively tax foreign income.  It also is specifically designed to force large, profitable tech companies to pay more.  All of this bodes poorly for the stock market, but it would be a good thing for REITs, their special tax status might actually be appreciated again.  

Real estate also provides diversification.  While REITs are still stocks, they don’t always move in the same direction as the broad market.  And their above-average dividend yields are a nice shelter in a downturn.

Boston Properties (BXP) is arguably the king of office space: It owns prime properties in New York City, Boston, Washington D.C., San Francisco and Los Angeles.  It owns 51.9 million square feet and 196 properties, including Times Square Tower in New York City and the Prudential Center in Boston.  It also has 13 other properties under construction, according to S&P Capital IQ.

12-08-2020–ET up 6.21%

Energy Transfer also recently announced that it will make its first move into renewable energy through the purchase of 28 MWac of solar power.  Some analysts expect that the move will drive long-term shareholder rewards and strong double-digit returns.

Energy Transfer sports a 9.10% yield, one of the highest in its group.  Ongoing yield spread normalization could result in share price upside for Energy Transfer relative to its peers.

  Now may be an opportune time to buy for income-focused investors.  Of 13 analysts covering the stock 8 rate it a Strong Buy, 1 Moderate Buy,  4 Hold and no Sell ratings.  

12-09-2020–MMP up 3.93%

While oilfield service stocks are primarily concerned with drilling and extracting fossil fuels from the earth, MMP operates pipelines that transport gasoline, aviation fuels, and liquified gases to end users that include refiners, wholesalers, biofuel producers, and even railroads and airports that are transporting those commodities even further down the supply chain.  Magellan’s assets include a 9,800-mile refined products pipeline system with 54 storage terminals, and another 2,200 miles of crude oil pipelines and storage facilities with a capacity of 37 million barrels. 

With scale like this, it’s easy to see the appeal of this master limited partnership (MLP) as a key infrastructure provider.  MMP sports a 9.17% dividend yield and currently trades with a trailing twelve month P/E ratio of 10.50.  There are currently 9 Strong Buy, 3 Moderate Buy and 4 Hold ratings for the stock, resulting in a consensus rating of Buy.

12-10-2020–ADM down 0.02%

Archer Daniels focuses on food processing and ingredients.  They provide the solutions and components that all food manufacturers need to take their products to market.  With ADM stock, you’re not banking on any one name, but rather, the industry.

Moreover, Archer Daniels is particularly intriguing for those interested in plant-based meat companies but who don’t want to risk the volatility of buying Beyond Meat (BYND).  With ADM, you get exposure to the space but potentially mitigate the wildness.

As a bonus, an investment in ADM also means you are investing in an environmentally and socially conscious firm.  Archer Daniels is a highly rated member of the S&P ESG Index.  

12-10-2020–PLAN up 0.85%

Anaplan is positioned for gains from a robust uptick in demand for its cloud-based Connected Planning platform, which enables its users to improve decision-making across finance to supply chains, on a real-time basis.  

The rapid digital transformation that is taking place across all industries is driving the need for efficient planning and data-driven decision-making solutions.  Moreover, current economic weakness has increased the need for companies to optimize their spend patterns.  These factors favor prospects of PLAN.



12-10-2020–SNAP up 9.17%

One reason we like SNAP is that they have an incredible opportunity in front of them to close the monetization gap that exists between Snap and other public social media companies.  Up to this point, the company hasn’t yet come into its fullness as far as the advertising market is concerned.  But they’re currently improving their ad tech and over the next year we could see a huge re-acceleration in their business as they start executing some of these opportunities.  

12-10-2020–DBX up 8.07%

DBX has been benefitting from the evolving demand for seamless enterprise communication tools.  The company offers a platform that enables users to store and share files, photos, videos, audio files and documents.  Increasing demand for cloud storage, triggered by the coronavirus crisis imposed work-from-home wave, has been acting as a tailwind DBX.  Further, integration with leading apps like Zoom Video, Slack and Atlassian are likely to expand the Dropbox paying user base over the long run.

12-11-2020–ABBV up 0.5%

AbbVie is best known for hit drugs such as Humira and Imbruvica, which account for about 55% of ABBV’s 2020 sales.  But UBS, which calls the stock a Buy, says the market is underappreciating the potential of Rinvoq and Skyrizi, which treat rheumatoid arthritis and plaque psoriasis, respectively.  

“If ABBV is able to recreate its success in current indications to future indications, then Rinvoq plus Skyrizi alone will replace Humira completely with about $20 billion in sales,” UBS says. 

Considering the high dividend yield, the long-term growth forecast of almost 5% and the fact that shares trade at only ~ 9.64 times expected earnings, AbbVie looks like a slam-dunk value stock.