After beating the market by 71% in 2021, our research pays off again for clients so far in 2022.
Our Focus List Stocks: Long Model Portfolio, the best-of-the-best of our Long Ideas, and our Focus List Stocks: Short Model Portfolio, the best-of-the-best of our Danger Zone picks, outperformed the S&P 500[1] by a combined 32% as a long/short portfolio in the first nine months of 2022. The long portfolio contributed 5% while the short portfolio contributed 27% of the outperformance of the S&P 500 through 3Q22.
Figure 1: Focus List Stocks: Long/Short Performance in First Nine Months 2022: 32%
Sources: New Constructs, LLC
Figure 2 shows a more detailed breakdown of the Model Portfolios’ outperformance, which encompasses all the stocks that were in the Model Portfolios at any time through the first nine months of 2022.
Figure 2: 2022 Long/Short Performance of Stocks in the Focus List Model Portfolios Through 3Q22
Sources: New Constructs, LLC
Performance includes the performance of stocks currently in the Focus List Stocks: Short Model Portfolio, as well as those removed during the first nine months of 2022.
Underscoring just how important reliable fundamental research is in turbulent markets, the long/short performance of these Model Portfolios has beaten the S&P 500 by an even wider margin, 74%, since the start of 2021.
Figure 3: Focus List Stocks: Long/Short Performance Since Beginning of 2021: 74%
Sources: New Constructs, LLC
Pro-and-higher members get real-time updates and can track all our Model Portfolios on our site. The Focus List Stocks: Long Model Portfolio contains the “best of the best” of our Long Ideas, and the Focus List Stocks: Short Model Portfolio contains the “best of the best” of our Danger Zone picks. Both Model Portfolios leverage superior fundamental data, which provides a new source of alpha.
We’re here to help navigate these turbulent times. Our uniquely rigorous fundamental research consistently earns SumZero’s #1 All-Time ranking, along with #1 rankings in several other categories.
Investors deserve reliable fundamental research, more than ever, to find safer, undervalued stocks and to protect their portfolios from overvalued stocks and falling knives.
This article originally published on October 6, 2022.
Disclosure: David Trainer, Kyle Guske II, and Matt Shuler receive no compensation to write about any specific stock, sector, style, or theme.
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[1] Stocks are in the Focus List Model Portfolios for different periods of time as we open and close positions during the year. When measuring outperformance of the Focus List Model Portfolios, we compare each stock’s return to the S&P 500’s return for the time each is in the Focus List Model Portfolios. This approach provides more of an apples-to-apples comparison of how each stock performed vs. the S&P 500.