Many companies released their third-quarter financial results in October, but what impact did that have upon QVP and the companies making up the strategy?
QVP posed robust returns of 6.28 percent for the month, but unfortunately that lagged behind the market with the S&P 500 seeing growth of 8.30 percent. Despite trailing the market this past month though, QVP remains the superior choice for any investor, showcasing long-term outperformance which has beaten the market for eight of the past ten years.
QVP has outperformed more 99.5 percent of other money managers.
It has been our experience that QVP can underperform in markets that tend to have a component of irrationality, examples being the dot.com craze or during the financial melt-down. Market manipulation by the Federal Reserve could be playing a similar role at this time as well. However, we’ve also found that when the market returns to a state of “normalcy,” QVP tends to perform much better than the markets at large as these temporary conditions unwind.
Bearing in mind the exemplary track record of QVP, we hope to see further growth in November and exceed that of the market too. Listed below are the top five performing stocks in August for our large-cap value strategy:
5. Helmerich & Payne (HP) +19.06%
Despite sinking oil prices, the Oklahoma-based drilling company had a very productive month for investors, beating its 50-day moving average. Aside from that, it was a relatively quiet October for the company.
The innovate FlexRig by Helmerich & Payne.
4. Interpublic Group (IPG) +19.86%
This marking conglomerate also beat its 50-day moving average in October, and that was before the announcement of their third-quarter results for the year. Results beat Wall Street expectations, with net incomes of 18 cents per share and earnings (adjusted for non-recurring cost) at 27 cents per share.
The company has shown growth of 20.90% over the past year after a rocky start to 2015.
3. TEGNA (TGNA) +20.77%
Another international marketing and media company, TEGNA, saw the third best performance for QVP in October.
A first-time entry to this list, early in the month the company was first able to resolve issues with DISH Network, coming to agree on a multi-year agreement regarding DISH Network’s continued carriage of TEGNA’s local television stations. The stations had been removed from the DISH lineup, but have since returned.
TEGNA also beat Wall Street estimates when they announced their third-quarter earnings, with profits of $90.6 million, before declaring their $0.14 quarterly dividend would be payable January 4th of next year.
TEGNA currently owns 46 television stations across the United States.
2. Dow Chemical (DOW) +21.86%
Dow had a particularly robust month, grabbing headlines across the board after their quarterly profit surged to 51.4 percent, benefitting from the falling costs of raw materials. The company's net income rose to $1.29 billion.
Dow also announced that it was increasing its quarterly dividend by 10 percent to 46 cents a share, payable in January next year. They are also planning to accelerate their three-year, $5 billion stock buyback program, by repurchasing $1 billion worth of its stock in the fourth quarter of this year, and the rest in 2016.
The company also announced its intention to triple its revenue from sub-Saharan Africa in the next five years, seeing great potential in agriculture, as well as mining and manufacturing, and is investing in local staff and manufacturing plants to that end.
1. Noble Corp (NE) +24.95%
Not for the first time, but the top performer for October was drilling company, Noble Corporation. They announced third-quarter earnings of $325.8 million, beating analyst expectations. This was mainly attributed to the company cutting costs.
Noble decided to slash their dividend by nearly 60 percent, having previously been the highest dividend payer amongst drilling companies. Despite their positive quarterly results, the perception is that the company felt they could reduce the dividend with minimal resistance form shareholders given the competitive landscape. The extra funds ($200mm annually) should bolster the company's liquidity as energy prices continue to suffer.
Noble was founded in 1932.
See the chart below for a more in-depth look at the performance of QVP’s five top stocks during the month of August:
You can also explore the Kruse Asset Management website to find out more about our premier investment strategy: QVP.