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Thomas Macpherson
Thomas Macpherson
Articles (192)  | Author's Website |

Nintai Returns: Q1 2015

Portfolio Returns

The markets were relatively flat during the quarter. The S&P 500TR was up by 0.96%, the Morningstar Total US Equity Index was up 1.28% and the Nintai Proxy (80% Vanguard US Equities Total Market Index, 15% Vanguard Global Equities Total Market Index, and 5% Cash) was up 1.7%. The Nintai Portfolio handily beat the averages gaining 8.8% net all fees.

Several stocks drove our performance this quarter. Terra Nitrogen (NYSE:TNH) was up 45%, Novo Nordisk (NYSE:NVO) was up 26%, and Manhattan Associates (NASDAQ:MANH) was up 24%. Several companies brought up the rear with Fastenal (NASDAQ:FAST) down 12%, Dolby Labs (NYSE:DLB) down 11%, and Qualcomm (NASDAQ:QCOM) down 6%.

The following is the breakdown of returns by 3YR, 5YR, and 10YR.

YTD

3YR

5YR

10YR

Nintai Portfolio (net fees)*

8.8%

11.7%

16.0%

15.4%

S&P 500 TR

1.0%

16.1%

14.3%

8.1%

Morningstar US Market Index

1.3%

14.1%

12.4%

6.3%

Nintai Proxy*

1.7%

11.5%

10.8%

5.6%

All data generated by Morningstar

* Includes management fee of 0.75% of AUM

**Vanguard Total International Stock Index (20%), Vanguard Total US Market Stock Index (70%), Cash (10%)

Portfolio Changes

We made four (4) changes in the portfolio this quarter. That might be a record! First, we said goodbye to Factset Research (FDS) that was trading in excess of 40% of its estimated fair value. In its place we purchased Computer Modelling Group (CMDXF). Our reasoning can be found in much greater detail in our article "Changes in the Nintai Portfolio" published on February 20 and can be found here. We sold roughly one-third of our holdings in Novo Nordisk as it had reached nearly 11% of our portfolio. Finally we sold one-half of our position in Manhattan Research due to valuation and its size in the portfolio. Cash currently stands at roughly 9% of assets under management. Portfolio turnover was an appalling 11.7% during the quarter.

Portfolio Positioning

The current P/E ratio of the portfolio is 16.2 or roughly 13% less than the current S&P 500 ratio. Projected earnings growth over the next 5 years is 13.9%, or roughly 50% greater than the S&P 500. Additional measures can be seen here on the Nintai Abacus report:

Thoughts On The Quarter

While extremely pleased with the portfolio over the past quarter, we continue to keep our eye on the measure that really matters

About the author:

Thomas Macpherson
Thomas Macpherson is Managing Director and Chief Investment Officer at Nintai Investments LLC. He is also Chairman of the Board at the Hayashi Foundation, a Japanese-based charity serving special needs children and service pets. The views expressed in his articles are his own and not necessarily those of the firm. He is the author of “Seeking Wisdom: Thoughts on Value Investing.”

Visit Thomas Macpherson's Website


Rating: 5.0/5 (5 votes)

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Comments

The Science of Hitting
The Science of Hitting - 5 years ago    Report SPAM

Thomas - Nice start to the year! I wish I would've sold everything on 12/31 and gave it all over to you at Nintai; in fact, that's looked like a good idea for the last decade! :) Congrats on your success.

Thomas Macpherson
Thomas Macpherson premium member - 5 years ago

Thanks so much Science. I was pointing out to a colleague this is the first quarter we've outperformed in somewhere around two years. The moral is we shouldn't get too cocky! Hope to see more of your writing soon. Thanks again. - Tom

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