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CAPS Dogs Didn't School the Market

Recs

3

September 30, 2012 – Comments (0) | RELATED TICKERS: HPQ , UNH , INTC

 

We've been tracking how the stocks picked by the article series Dogs of the CAPS performs real-time here on CAPS since the start of the year.

Over the past five years, picking Dow Dogs that conformed to the old Foolish Four strategy and were rated 3-stars or better on CAPS has handily outperformed the FF, the DD, the DJIA, and the S&P 500. 

The continued weak performance of Intel (Nasdaq: INTC) weighed heavily on performance for the CAPS Dogs, dragging down returns across the year, though the relative stronger performance by some of the stalwarts -- Pfizer (NYSE: PFE), General Electric (NYSE: GE), and more recently AT&T (NYSE: T) -- helped keep most returns above the index averages. And in those months where we had interlopers like Kraft in April and JPMorgan Chase last month, our CAPS Dogs have done well.

September was a positive month though the returns weren't enough to beat the indexes, so we'll be keeping an eye on our CAPS Dogs through the month of October and see if they can scare themselves up some big growth numbers.

(prices are adjusted for dividends and splits, if any) 

January Dogs 

General Electric: Starting Price: $17.60 - End Price: $22.71 +29.03%
Pfizer: $21.21 - $24.85 +17.16 %
Intel: $23.88 - $22.66 -5.11%
AT&T: $29.39 - $37.70 +28.27%
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Average Return: +17.34%
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DJIA: 12,217.56 - 13,437.13 +9.98%
S&P 500: 1257.60 - 1440.67 +14.56%

Dow Dogs: +12.2% (not including dividends)

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February Dogs

GE: Starting Price: $18.39 - End Price: $22.71 +23.49%
PFE: $20.97 - $24.85 +18.50%
INTC: $26.02 - $22.66 -12.91%
T: $29.00 - $37.70 +30.00%
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Average Return: +14.77%
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DJIA: 12,632.91 - 13,437.13 +6.37%
S&P 500: 1406.58 - 1440.67 +2.42%

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March Dogs

GE: Start Price: $18.89 - End Price: $22.71 +20.22%
PFE: $20.92 - $24.85 +18.79%
INTC: $26.69 - $22.66 -15.10%
T: $30.16 - $37.70 +25.00%

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Average Return: +12.23%
--------------------------------------- 
DJIA: 12,952.07 - 13,437.13 +3.75%
S&P 500: 1406.58 - 1440.67 +2.42%

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April Dogs

GE: Start Price: $19.90 - End Price: $22.71 +14.12%
PFE: $22.43 - $24.85 +10.79%
T
: $30.79 - $37.70 +22.44%
Kraft: $37.72 - $41.35 +9.62%

---------------------------------------
Average Return: +14.24%
--------------------------------------- 
DJIA: 13,212.04 - 13,437.13 +1.70%
S&P 500: 1408.47 - 1440.67 +2.29%

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May Dogs

GE: Start Price: $19.41 - End Price: $22.71 +17.00%
PFE: $21.87 - $24.85 +13.63%
T
: $34.17 - $37.70 +10.33%
INTC: $28.20 - $22.66 -19.65%

---------------------------------------
Average Return: +5.33%
--------------------------------------- 
DJIA: 13,213.63 - 13,437.13 +1.69%
S&P 500: 1397.91 - 1440.67 +3.06% 

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June Dogs

GE: Start Price: $18.93 - End Price: $22.71 +19.97%
PFE: $23.00 - $24.85 +8.04%
T
: $35.66 - $37.70 +5.72%
INTC: $26.65 - $22.66 -14.97%

---------------------------------------
Average Return: +4.69%
--------------------------------------- 
DJIA: 12,393.45 - 13,437.13 +8.42%
S&P 500: 1310.33 - 1440.67 +9.95%

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July Dogs

GE: Start Price: $20.84 - End Price: $22.71 +8.97%
PFE: $22.68 - $24.85 +9.57%
T
: $32.91 - $37.70 +14.55%
INTC: $25.84 - $22.66 -12.31%

---------------------------------------
Average Return: +5.20%
--------------------------------------- 
DJIA: 12,880.09 - 13,437.13 +4.32%
S&P 500: 1362.16 - 1440.67 +5.76%

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August Dogs

GE: Start Price: $20.75 - End Price: $22.71 +9.45%
PFE: $23.82 - $24.85 +4.32%
T
: $37.92 - $37.70 -0.68%
JPM: $36.00 - $40.48 +12.44%

---------------------------------------
Average Return: +6.38%
--------------------------------------- 
DJIA: 13,008.68 - 13,437.13 +3.29%
S&P 500: 1379.32 - 1440.67 +4.45%

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September Dogs

GE: Start Price: $20.71 - End Price: $22.71 +9.66%
PFE: $23.86 - $24.85 +4.15%
INTC: $24.83 - $22.66 -8.74%
T: $36.64 - $37.70 +2.89%

---------------------------------------
Average Return: +1.99%
--------------------------------------- 
DJIA: 13,090.84 - 13,437.13 +2.65%
S&P 500: 1406.58 - 1440.67 +2.42%

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Each month I'll update the list of stocks that would be tracked by the strategy and we'll follow them here on this blog each month.

There were a number of changes that occurred this month. For example, on Sept. 24 Kraft was removed from the DJIA in favor of United Health Group (NYSE: UNH) so it will no longer be a stock to be considered, though we'll still follow it for our April group. United Health, with a yield of 1.5%, probably won't make it to our list of stocks anytime soon.

This month the top four stocks were Hewlett-Packard (NYSE: HPQ), Intel, Pfizer, and AT&T, but the computer maker, with a one-star CAPS rating, isn't eligible for inclusion (three-stars or better!), so we'll be going with just three CAPS Dogs in October.

As we've noted in the past, it shouldn't really matter when an investor starts the strategy, though some have suggested there's a "January effect" that helps the strategy, but we'll be able to prove (or disprove) that by keeping tabs on those stocks that fall off  the list and those that are added.

Here then are October's CAPS Dogs with their new starting prices: 

INTC: $22.66 5-Stars

PFE: $24.85 4-Stars

T: $37.70 3-Stars

DJIA: 13,437.13

S&P 500: 1440.67

Here's to having a dog in the race!

Rich  

Rich Duprey owns shares of Intel, General Electric, and Pfizer, but he holds no other position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of Intel and JPMorgan Chase. Motley Fool newsletter services have recommended buying shares of Intel. The Motley Fool has a disclosure policy.

   

 

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