Argus is truly an independent research firm free from most of the same conflicts of interest of other research firms, which is why we give its research a close look when it issues upgrades or downgrades. We also review its monthly portfolio changes because it does not make any investment decisions with another side of its business seeking investment banking relationships.
We have seen new portfolio changes for the September 1, 2013 model portfolio. Changes were made to the equity income portfolio, growth and income, as well as mid-cap growth.
In the model equity income portfolio, Argus has recommended adding shares of Clorox Co. (NYSE: CLX) at $85.15 for a 3.4% allocation of the portfolio. The firm is selling its full holding of KKR & Co. L.P. (NYSE: KKR). Since inclusion in January 2013, the KKR shares have appreciated 27% while providing an annual yield that has ranged as high as 6.7%. Argus sees the benefits of Clorox continuing ahead with it being a S&P Dividend Aristocrat.
In the growth & income model portfolio, Argus is recommending a new purchase of Mattel Inc. (NASDAQ: MAT) at $42.80 for a 4.6% of the portfolio. It has also recommended selling its entire stake of United Technologies Corp. (NYSE: UTX) at $106.45. Since inclusion in May 2012 into this portfolio, United Tech shares have appreciated more than 35% while providing an annual yield of at least 2.0%. Mattel’s strength is based upon American Girl and Monster High dolls.
In the mid-cap growth portfolio, Argus is recommending that investors add Eaton Corp. PLC (NYSE: ETN) at $66.00 for some 2.6% of the portfolio. It is selling 100% of its position in Goodyear Tire & Rubber Co. (NASDAQ: GT) at $18.75. Since inclusion in July 2012, Goodyear shares appreciated 69%. Argus said of Eaton”
Eaton has a balanced presence in early-, mid- and late-cycle sectors, as well as recession-resistant service capabilities. Eaton’s acquisitive nature has turned the company into a growth story, posting 38% annual sales growth in 2Q13 that was primarily driven by the Cooper acquisition.
As a reminder, Argus releases its model portfolio changes for each month sometimes days or even a couple of weeks ahead of the start of each month.