QVP In February

Despite a sluggish start to 2016 by the country’s markets, QVP recorded an excellent return in February to put on the front foot heading into spring. While the S&P 500 was down -0.41 percent for the month (and the Russell 1000 Value Index was also down -0.37 percent), QVP had a positive return of 1.83 percent for February.


While the year is still young, that means for 2016 so far (after a sluggish January) that the S&P 500 is down -5.47 percent while QVP is only down -3.75 percent. This is momentum that we hope to capitalize on in March as the markets begin to revert back to normalcy.


Our clients are delighted as QVP continues to outperform the market on a long-term consistent basis and offer excellent value to their portfolios, as illustrated in the table below:

Lifetime performance of QVP compared to our two benchmarks.

Listed below are the top five performing stocks in February for our QVP strategy:


5. Magna International (MGA) +12.32%


Appearing for the first time on our list of top performers for QVP, Magna are a leading global automotive supplier with 305 manufacturing operations and 93 product development, engineering and sales centers in 29 countries.


The company’s stock price was buoyed at the end of the month by the announcement of their Q4 2015 which beat analyst expectations. Sales fell year-over-year to $8.57 billion from $8.79 billion due to the strengthening of the dollar but exceeded the Capital IQ consensus of $8.28 billion.


Magna also announced that they will increase their dividend to $0.25 per common share, up 14% from the previous payout, which will be paid out on March 24 to shareholders.


4. Garmin (GRMN) +15.15%


A regular name to appear among QVP’s top performers for the month, Garmin also beat Wall Street expectations when announcing their Q4 2015 results last month.


The maker of personal navigation devices reported Q4 earnings per share of $0.74, down from $0.77 for the same period the previous year, but easily beating the Capital IQ consensus estimate of $0.48. The company also reported quarterly revenue of $781 million, an 11% increase from the past year, and ahead of the Wall Street forecast of $761 million.


Revenue was helped by the growing demand for navigational devices used in fitness and aviation.

Garmin's Fenix 3 is a smartwatch, fitness band and GPS watch all-in-one.

3. Dow Chemical (DOW) +15.74%


Dow was upgraded by Susquehanna International Group last month to a positive rating from neutral as the company also announced that it had decided to settle a $1.06 billion judgement against the company for $835 with regard to claims that the company artificially inflated polyurethane prices in the late 1990s and early 2000s.


With the passing of Supreme Court Justice Anton Scalia, the company felt it unlikely that the decision would go their way, issuing the following statement:


Growing political uncertainties due to recent events within the Supreme Court and increased likelihood for unfavorable outcomes for business involved in class action suits have changed Dow’s risk assessment of the situation. Dow believes this settlement is the right decision for the company and our shareholders.


Regulators claimed that they needed more time to review materials relating to the merger of Dow Chemical and DuPont (who announced a new site for their proposed Agriculture unit in Delaware) which will extend the merger's waiting period for another 30 days.


2. Best Buy (BBY) +15.97%


Best Buy had a bumpy start to the month after the company's stock rating was lowered to “perform” from “outperform” at Oppenheimer, and an announcement that they would be cutting jobs at their headquarters after an underwhelming holiday season.


The company’s Q4 results reported a profit of $479 million though, with profit of $1.40 per share, beating Wall Street expectations. Their next quarterly dividend was then announced to be increasing by 21.7 percent to $.0.28 per share.


1. Mattel (MAT) +19.38%


Toy manufacturer Mattel reached a 52-week high at the beginning of February which saw them upgraded by Argus Research to a buy rating from a sell.


Despite the volatility of the market this year, Mattel has seen their share price increase by an impressive 20.80 percent to date. With its shares currently trading at around $32.50, Mattel's annual dividend yields a robust 5 percent, which is three percentage points higher than the 2 percent yield paid out by the average stock in the S&P 500.

Mattel is relying on their exclusive DC Comics rights to combat the Star Wars toys exclusive to Hasbro.

See the chart below for a more in-depth look at the performance of QVP’s five top stocks during the month of February.


You can also explore the Kruse Asset Management website to find out more about our premier investment strategy: QVP.

QVP is also available through Prometheus, our new investment product which offers anybody the chance to invest like a millionaire.

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Founded in 2007, Kruse Asset Management was born from a formulation model, designed to outperform the typical results garnered within financial markets. Building on that proven system, Kruse Asset Management employs a three-pronged approach to investment.

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