Need to Know: This portfolio has outpaced the S&P by a factor of four this year, and here are its best stock picks

Need to Know: This portfolio has outpaced the S&P by a factor of four this year, and here are its best stock picks

14 Oct    Finance News

“Granny shot” stocks.

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Our call of the day offers up stock ideas from a portfolio that has returned 34.1% year to date, versus 9.4% for the S&P 500. The so-called “Granny Shots” portfolio from Fundstrat Global Advisors gets its name from National Basketball Association legend Rick Barry, who shot free throws underhanded, “granny style,” for a career percentage of around 90%.

As Fundstrat founderThomas Lee explains, the “Granny Shots” portfolio is about “the best of the best” of their portfolios — stocks that have an attractive long-term thesis, though at times gain traction slowly, therefore require patience. Since its inception in January 2019, the portfolio has been beating the S&P by 2,470 basis points.

Note, that the granny portfolio has gotten a boost from some of those all-star tech performers this year — Apple, Alphabet GOOGL, and Microsoft MSFT.

Fundstrat rebalanced the portfolio for the third quarter to add five new names and deleting six. Lee highlights these 35-year charts to illustrate how these stocks might be ready for a revival. Among the new additions is semiconductor equipment maker KLA Corp. KLAC.

Fundstrat/Bloomberg

Also included is global media group Omnicom OMC, which Fundstrat notes has suffered some big “headwinds” from the pandemic this year. Another pick is WW Grainger GWW, an industrial that plays into the idea of an economic rebound:

Fundstrat/Bloomberg

They also added chip makers — Intel INTC, which appears to be “shaking off its 2020 setbacks,” and Qualcomm QCOM, which seems like it is “waking up from a 20-year slumber.”

Fundstrat/Bloomberg

As for those leaving the portfolio, online travel group Booking Holdings BKNG, multinational Emerson Electrics EMR, hardware and software company HP HPQ, automotive parts supplier BorgWarner BWA, fertilizer maker CF Industries CF, and consumer goods group Procter & Gamble PG are out.

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