Republican VP candidate Paul Ryan has repeatedly taken the spotlight in recent months for a number of reasons — his love of Ayn Rand, his chiseled P90x physique and perhaps on a quieter level, his smart investment choices. In fact, looking to Ryan’s portfolio could be the key to boosting your own investment return.
A good portion of Ryan’s wealth seems attributable to steady mutual fund investments, but he also seems to be a pretty good individual stock picker. We’re going to just focus on his individual stocks.
Why Follow Paul Ryan’s Investments?
You can potentially profit from following the investment moves of shrewd investors. If we find Paul Ryan is a shrewd stock market investor — as has been reported — following his moves could prove potentially profitable to you. Of course, you should never blindly buy stocks based upon others’ stock buys or existing holdings. However, using a shrewd stock pickers lists of buys and holdings can be a good starting point for additional research.
Center for Responsive Politics
The data in this article comes from the Center for Responsive Politics. The CRP is a non-profit, non-partisan research group that tracks money in politics, analyzing the finances of the members of the U.S. Congress each year. The analysis is based upon the annual financial disclosures members are required to submit. These disclosures do not list an exact value for each holding, but a range of values.
Paul Ryan’s Stock Buys in 2011
These are listed by the date purchased. All stocks fall into the $1,001 to $15,000 range.
As points of reference, the S&P 500 is up 17.9% YTD 2012 and 22.7% in the past 1-year period to Sept. 18.
Thus far in 2012, three of Ryan’s six stock buys last year are trouncing the market, one is slightly lagging, one is somewhat lagging and one is significantly lagging. Given the financial disclosure ranges are very broad, we have very little idea as to the relative values of each of these stock to the others. If Ryan bought an equal dollar value of each, he’s beating the market by almost 2% — not a home run, but solid. If he bought significantly less, dollar-wise, of his one clunker — CHRW — than he did of the big winners, then he’s handily beating the market.
Select financial and stock stats for each company are listed below. I included a brief summary of operations for the companies that are not likely to be household names to all readers.
C.H. Robinson (CHRW)
C.H. Robinson Worldwide provides freight transportation services and logistics solutions to companies worldwide. It offers trucking, rail, ocean and air transportation, as well as other services through contractual relationships with transportation companies. It also buys and sells fresh produce. Additionally, it provides payment management and business intelligence services.
Operating and profit margins are rather slim — 6.5% and 4.1%, respectively. Last quarter’s revenue growth was 9.2%, while earnings increased 3.2% — margins contracted, a negative. P/E is 20.8.
The company has no debt, Return-on-Equity (ROE) is a hefty 34.7% and the dividend yield is 2.3%.
Operating and profit margins are razor thin — 0.5% and 1.2%, respectively. Last quarter’s revenue growth was 29.5%, while earnings dropped 96.3% — margins significantly contracted, a negative. P/E is a whopping 315.
Return-on-Equity (ROE) is an anemic 5%. Positively, the company has no debt and 19% insider ownership.
EMC provides enterprise data storage systems and software. It also offers information security solutions; information intelligence software and service; and virtual and cloud infrastructure products.
Operating and profit margins are 18.7% and 12.8%, respectively. Last quarter’s revenue growth was 9.6%, while earnings increased 18.9% — margins widened, a positive. P/E is 22.9.
Return-on-Equity (ROE) is a so-so 13.8%, but positively, free cash flow is good and debt is relatively low.
Priceline.com is an online travel company engaged in a wide range of travel-related services.
Operating and profit margins are 33.8% and 25.6%, respectively. Last quarter’s revenue growth was 20.3%, while earnings increased 37.4% — margins widened, a positive. P/E is 26.
Return-on-Equity (ROE) is a hefty 48.4% — however, ROE is inflated by debt, and the company has a moderate debt load.
Operating and profit margins for Starbucks are 13.1% and 10.7%, respectively. Last quarter’s revenue growth was 12.7%, while earnings increased 19.3% — margins widened, a positive. P/E is 37.4.
ROE is a solid 28.5%, debt is low, and the dividend yield is 1.4%.
Operating and profit margins are 20.8% and 15.3%, respectively. Last quarter’s revenue decreased 3.3%, while earnings increased 5.9% — margins widened, a positive. P/E is 15.
ROE is a huge 74.4% — however, it’s not as good as it would appear as ROE is inflated by debt, and IBM has a hefty 1.6 Debt/Equity ratio. Free Cash Flow is solid. The stock has a 1.6% dividend yield.
Here’s a bonus for you — a list of all stocks owned by Ryan at the end of last year…
Paul Ryan’s Stock Holdings Year End 2011
His top holding — Home Depot — has been hitting home runs: It’s up a whopping 42% YTD 2012 and 75% over the 1-year period to Aug. 18.
Of course, mirroring the investment choices of one person is risky and could have adverse consequences, but Paul Ryan’s stock picks make a great place to start in your search for high-performing stock investments that could earn you quite a bit in returns.