Elite 25 April Update: How to Beat the World’s Best Investors

Carl Icahn, David Einhorn, and Warren Buffett are three of the all-time greatest investors…

  • Einhorn’s hedge fund has returned 16% annually over the past 21 years.
  • Icahn’s hedge fund has returned 31% annually over 43 years.
  • Buffett’s company, Berkshire Hathaway, has returned 20% annually over 50 years.

But you don’t need to spend years running a hedge fund to generate the types of returns these guys have.

All you need is 30 minutes per month. And the PBD Elite 25 portfolio.

Over the past 20 years, the Elite 25 has returned 21% per year. That’s compared to just 7% for the S&P 500.

By following the Elite 25 strategy, you could turn a $100,000 investment into over $5 million.

Each month, we update our Elite 25 portfolio. We remove stocks that are too expensive and replace them with new ones that meet our three criteria.

We’ll get to the update in a moment. But first, a review of our system…

Beating the Best

For those who are new to the portfolio or need a refresher, our Elite 25 is made up of companies that have a high return on invested capital (ROIC), high growth, and are cheap.

Here’s how it works…

First, you find all the companies that are:

  • Earning an ROIC over 20% per year
  • Growing revenue, free cash flow, and profit margins.

Then you buy the cheapest 25 companies that match those criteria.

At the beginning of each month, you’ll go through the process again. Sell any companies that dropped out of the cheapest 25. Buy any that joined.

So let’s see how our Elite 25 performed last month…

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Elite 25 Crushes the Market in March

In March, the 25 stocks we held gained an average of 3.3%. The overall market was up 0.1% for the month.

That’s the kind of outperformance we expect to see more often.

(February was an anomaly created by a couple terrible earnings reports. But earnings releases slowed down in March. And our quality companies took off. You can read our March update here.)

The biggest performer was electronics payment company Qiwi (QIWI) with a 24% gain.

In this month’s update, there are only three changes.

Here’s the updated list for April, listed in alphabetical order (buys shaded in green, sells shaded in yellow):

Company Name  Ticker  Industry System Says
AbbVie Inc. ABBV Biotech Hold
Aerojet Rocketdyne Holdings AJRD Aerospace/Defense Buy
American Outdoor Brands AOBC Retail/Guns Hold
Brinker International EAT Restaurants Hold
Brunswick Corp. BC Recreational Goods Hold
Foot Locker FL Retail Hold
Gilead Sciences GILD Biotech Hold
Herbalife HLF Nutritional Products Hold
Hibbett Sports HIBB Retail Sell
HNI Corp. HNI Home & Office Furnishings Buy
InterDigital IDCC Communications Buy
L Brands Inc. LB Retail Hold
Lear Corp. LEA Auto Parts Hold
Meridian Bioscience VIVO Pharmaceutical Equipment Hold
Michael Kors KORS Retail Hold
Michaels Companies Inc. MIK Retail Sell
National CineMedia Inc. NCMI Advertising in Movie Theaters Hold
Natural Health Trends Corp. NHTC Natural Drugs Hold
Nautilus Inc. NLS Sporting Goods Hold
Qiwi Plc QIWI Payment Processor Hold
Robert Half International RHI Professional Services Sell
Ruth’s Hospitality RUTH Restaurants Hold
S&P Global Inc. SPGI Investment Information Hold
Skyworks Solutions SWKS Semiconductors Hold
Stamps.com STMP Digital Postage Stamps Hold
Tenneco TEN Auto Parts Hold
United Therapeutics UTHR Biotech Hold
VeriSign Inc. VRSN Internet Services Hold

It should take you no more than 30 minutes each month to make these trades.

In less time than it takes to watch one episode of your favorite TV show, you can position yourself to turn $100,000 into $5 million.

Regards,


Nick Rokke, CFA
Analyst, The Palm Beach Daily

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The legislation is the latest indication that blockchain technology is moving from its theoretical testing phase to real-world application phase. That’s why we continue to follow this story. It could be the largest tech trend in history.

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From Terry G.: I agree with your Big Short article that the Canadian real estate market is overvalued. But unlike Americans, most Canadians need a 20% down payment to buy a home. So I believe the mortgages are a little more secure. A bubble may be in the works and Canadian banks will take a hit… but not like the U.S. banks. Good article and glad to see some content on markets outside the U.S.

From Brian H.: Keep up the great work. Cryptocurrencies are one of the best investments/speculations I have ever received.

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Last week, our colleagues over at Stansberry Research received an update from their confidential source in Washington—the powerful insider they call the “Metropolitan Man.” And it was a doozy

For 30 minutes… he described the scenario he thinks is going to unfold this year that could change the balance of power in this country for the next 50 years.

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