Visa Inc. (V) – bought @200, it went up to $227 in 4 weeks = 13.5% return

We recommended the stock back in February as a great long-term value play, and as one of our favorite picks in the Financial Transaction Services industry. We noted that the price was facing strong resistance around the $200 mark and that a break above that level would serve as a great buying opportunity for our followers. We recommended for our clients to wait for the break before committing fully to the stock and opening their long positions. The anticipated break to the upside occurred shortly thereafter and stock moved 13.5% higher in less than 4 weeks. The stock is part of the XLK, which tracks an index of S&P 500 technology stocks. XLK was the first to launch in this space, as such it offers a more narrow focus on the US technology segment. Its S&P 500-only portfolio tilts away from our segment benchmark. XLK is heavily concentrated and also a few that seem like misfits, such as financial payment processers or telecom firms. Its limited selection universe excludes small-caps and most midcaps. Avoiding smaller, less-stable firms results in lower volatility and a tilt toward value. Through our correlation-confirmation approach we compared XLK’s price performance to the XLY Consumer Discretionary Select Sector SPDR ETF, and used the strong and positive 10-year correlation of 85% between the two indices in order to validate our market recommendations.


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