Leuthold Funds has reduced the investment advisory fee for the Leuthold Global Fund effective February 13, 2017. Click here to review Prospectus Supplement.
Kicked Out of the Four Percent Club (February 2013)
Last spring we noted Apple Inc. had joined a club no company has ever managed to remain a part of—stocks that have reached a four percent weighting in the S&P 500. By March 2012 (its second month in the Four Percent Club), Apple’s market cap exceeded the capitalization of the entire S&P Small Cap 600, and no doubt institutional owners of the stock belittled their Small Cap colleagues over this fact (although Small Cap managers are laughing now).
- Apple’s S&P 500 weight—after a fairly typical 10-month tenure in the Four Percent Club—is now 3.20%, and no company has regained admittance after falling this far. (Once you mingle with the “commoners” they don’t want you back.)
Is Apple Forever? (April 2012)
First, I must disclose that The Leuthold Group owns Apple stock in some of its quantitative strategies, but we’ve performed no investment banking services for the company in the last 12 months (or ever). You’ve no doubt heard the mind-bending stats related to the rise in this stock (...market cap equal to 300 years of beer consumption in Ireland, and to twice the annual U.S. automotive aftermarket, etc.) Closet indexers are probably aware that Apple’s market capitalization of $560 billion on March 30th matches the combined cap of the bottom 125 companies in the S&P 500. Yet Apple’s sales and earnings today are several-fold those of Cisco Systems when that company’s market cap matched the smallest 190 companies in the S&P 500 in March 2000.
- Apple is worth more than the entire S&P Small Cap 600 ($560 billion versus $540 billion). Extreme? Yes, but Apple’s 2011 calendar net income of $32 billion exceeded the combined net income of the Small Cap 600 by about 60%. While the fun lasts, Large Cap managers should take every opportunity to remind their Small Cap colleagues, “I own a stock larger than your benchmark!”
Success To Which No Company Should Aspire (April 2012)
Apple now comprises 4.4% of the S&P 500, making it the fifth entrant into the Four Percent Club since 1990 (see below). Prestigious, yes, but no company has been able to stay in this club since the inception of the S&P 500 in 1957. Membership for Microsoft, General Electric, and Exxon Mobil each lasted for about a year. Cisco Systems was booted out after a month (solely due to declining market cap—not the arrogance of CEO John Chambers). Finally, Apple bulls might note that the stock was dramatically cheaper upon its February entry into the Four Percent Club (at 15.3x trailing 12-mo. EPS and 5.6x book value) than three of the other four companies upon their initial entry.
The Leuthold Group, LLC provides research to institutional investors. It is also a registered investment advisor that uses its own re- search, along with other data, in making investment decisions for its managed accounts. As a result, The Leuthold Group, LLC may have executed transactions for its managed accounts in securities mentioned prior to this publication. The information contained in The Leuthold Group, LLC research is not, without additional data and analysis, sufficient to form the basis of an investment decision regarding any one security. The research reflects The Leuthold Group, LLC’s views as of the date of publication, which are subject to change without notice. The Leuthold Group, LLC does not undertake to give notice of any change in its views regarding a particular industry prior to publication of their next research report covering that industry in the normal course of business. The Leuthold Group, LLC may make investment decisions for its managed accounts that are inconsistent with, or contrary to, the views expressed in current Leuthold Group, LLC reports. As with any investment, there can be no assurance that any of the funds’ investment objectives will be achieved or that an investor will not lose a portion or all of his or her investment in a fund. Limited Partnerships may offer limited liquidity, may engage in speculative investment practices, may offer limited valuation information to investors and will not be registered. A prospective investor should consult its own tax advisor regarding tax consequences of an investment in a fund. This report does not constitute an offer or a solicitation of an offer to buy a security. Any offer of solicitation for Limited Partnerships must be made only by means of a delivery of a definitive private offering memorandum. The Partnership’s performance data have not been compiled, reviewed or audited by an independent accountant, and data for recent periods may be adjusted as a result of a subse- quent audit of the year of which those periods are a part. Because the views expressed in Leuthold Group, LLC research relate to industry groups rather than individual securities, industry group ratings cannot be assumed to apply to each individual security within a group. Thus, if industry group “A” is ranked “Attractive,” The Leuthold Group, LLC may still decide to sell one or more of the component securities in group “A.” Weeden Investors, L.P., Weeden & Co., L.P.'s parent company, owns 22% of Leuthold Group’s voting securities. An Executive Man- aging Director of Weeden & Co., L.P. is a member of The Leuthold Group, LLC board of directors. Weeden & Co., L.P. makes a market in AAPL, ABCO, ALGT, ALXN, AMAT, AMKR, AMTD, AMZN, APKT, ARBA, ARUN, ATVI, AZPN, BIDU, BIIB, BRKS, CACC, CATM, CAVM, CELG, CERN, CHKP, CIEN, CLMT, COST, CRAY, CREE, CSCO, CSGP, DELL, DLLR, DLTR, EFII, EZPW, FFBC, FISV, FITB, FULT, GHDX, GPRO, HA, HBAN, HGSI, HMIN, IMAX, INTC, IPGP, IPHS, ISIL, JAZZ, JDSU, JKHY, KALU, LBTYA, LSTR, MAT, MDCO, MGLN, MSCC, MSFT, NFLX, NIHD, NTAP, NXTM, ONNN, OZRK, PACW, PDLI, PRXL, PSMT, QLGC, QSII, RVBD, SATS, SCHN, SCHW, SFLY, SINA, SLAB, SMCI, SNDK, SPLS, STLD, STX, SUSQ, TEVA, TQNT, TRMB, TTWO, UHAL, UMPQ, VMED, VOD, VPHM, VRTX, WBMD, WERN, WRLD and ZBRA. Weeden & Co., L.P. Member FINRA, NASDAQ, and SIPC.