The secret to rapid growth is identifying quality stocks that have momentum working for them and riding the wave until it hits the beach.
We’ve managed to do that with my Internet Wealth Builder Growth Portfolio, and we’re reaping the rewards. The portfolio was ahead over 30 per cent in the latest six months, a record period for us.
This portfolio was launched in August 2012. It had an initial value of $10,000 and a target annual growth rate of 12 per cent. It’s a high-risk portfolio, with 100-per-cent exposure to the equity markets. It’s not a place for cautious investors.
Here are the securities that make up the current portfolio, with an update on how they have performed since our last review in late August. Prices are as of the close on March 13.
iShares U.S. Aerospace and Defense ETF (ITA-A). This ETF invests in the U.S. defense and aerospace industry. We added it to the portfolio in 2021. We posted a gain of US$10.24 per unit in the latest period and we received two distributions for a total of 65.8 US cents per unit.
Alimentation Couche-Tard Inc. (ATD-T). Alimentation operates convenience stores in Canada, the U.S., and Europe. This stock has been a huge winner for us and continues to generate handsome profits. It’s up $12.22 since our last review. The company raised its quarterly dividend by 25 per cent to 17.5 cents a share.
WSP Global Inc. (WSP-T). Montreal based WSP is an international engineering and design firm. This stock is another big winner. It gained $34.72 in the latest six-month period, plus we received two dividends totaling 75 cents per share.
TFI International Inc. (TFII-T). This Montreal-based trucking firm was added to the portfolio in February 2023 and is performing well. The shares were up $19.84 in the latest period. The company increased its quarterly dividend by about 12 per cent in December to 52.75 cents.
Nvidia Corp. (NVDA-Q). Nvidia makes computing chips for AI processors, and its sales keep beating even the most optimistic expectations. We added the stock to the portfolio in February 2023 and it has almost tripled since. Over the latest period, the shares gained US$416.24. That’s not a misprint!
Apple Inc. (AAPL-Q). Apple shares have lost momentum and were down US$16.52 in the latest period. We received two dividends of 24 US cents each.
Costco Wholesale Corp. (COST-Q). Costco shares were up US$191.94 in the latest period. As a bonus, the company declared a special year-end dividend of US$15 a share, on top its normal quarterly payout of US$1.02.
CGI Group (GIB.A-T). This is a Montreal-based international consultancy company that has been on our recommended list since August 2012. We added it to the Growth Portfolio last fall at $140.51. It’s now at $159.66. This is the only stock in the portfolio that does not pay a dividend.
Cash. We had cash and retained earnings of $2,734.15. We moved the money to Duca Credit Union, which was offering a high rate of 5.25 per cent. We received $71.77 in interest.
Here is how the portfolio stood at the close on March 13. Commissions are not considered. The U.S. and Canadian dollars are treated as being at par but obviously gains (or losses) on the American securities are increased due to the exchange rate differential.
Comments: We posted a record six-month return. The portfolio gained 30.6 per cent in that period, led by a huge contribution from Nvidia, which was up over US$400 per share, riding the AI wave.
But Nvidia wasn’t the only contributor. All the securities but one were up during the period, with Costco adding over US$200, including the US$15 special dividend. We also saw large contributions from Alimentation Couche-Tard, WSP Global, TFI International, and CGI. The only disappointment was Apple, which is facing headwinds on several fronts.
The total value of the portfolio (market price plus retained distributions) now stands at $118,518. Over the 11.5 years since this portfolio was launched, we have a cumulative return of 1,085 per cent. That’s an average annual compound growth rate of 24 per cent.
Changes: Apple has been good to us, but the company is facing a lot of problems, not least of which is the loss of market share in China. This is a dynamic portfolio; we don’t wait around until companies can sort out their difficulties. There are too many other good opportunities.
As a result, we’ll sell our position in Apple for a total of $9,050.94, including retained earnings.
We’ll replace it with Novo Nordisk (NVO-N), the Danish pharmaceutical company that manufactures Ozempic, the diabetes/weight loss drug that is in huge demand world-wide. The stock closed on March 13 at US$133.49. We’ll buy 70 shares for $9,344.30. We’ll take $293.36 from cash to make up the difference.
All else stays the same. There is a temptation to sell off some of Nvidia, which now has a portfolio weighting of more than 31 per cent. But the stock is hot right now and in a portfolio of this type, the best strategy is to ride your winners until they run of steam.
Our total cash plus retained earnings is now $2,560.60. We will stay with Duca Credit Union, which continues to offer a high interest rate of 5.25 per cent, with no minimum requirement.
Here’s a look at the revised portfolio. I will review it again in August.
Gordon Pape is editor and publisher of the Internet Wealth Builder and Income Investor newsletters.
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Gordon Pape