Portfolio Updates
Actionable Market Insights from Tuttle Ventures
Welcome to +15 new subscribers this week & +358 over the last 90 days!
This week I was featured in U.S. News in an article titled: How Millionaires Invest During a Bear Market —be sure to check it out if you want an inside look on where the wealthy put their money when the market turns south.
I highly encourage newcomers to go back and read through our past 65+ newsletters since we launched Tuttle Ventures.
Newsletter Rundown:
Portfolio Updates
Newest Holding NGVC 0.00%↑
Final Word
Portfolio Updates
Here are current portfolio holdings.
On 11/15/2022, we purchased a new equity holding from the outsized cash position.
For the year, this marks our 22nd trade.
For an actively managed discretionary portfolio-- this is above average turnover compared to prior years.
2022 is unique in many aspects.
The turnover in the portfolio has been higher than in 2021 mostly due to the defensive positioning in January and the shift into managed futures in the first quarter of 2022.
We expect to continue to have more trading over the next 3 months because of the outsized cash position.
The cash provides opportunities to buy great companies at discounts going forward.
Newest Holding
On November 21st we purchased NGVC 0.00%↑, Natural Grocers by Vitamin Cottage Inc. at $10.00/share.
The company is a Colorado based health food chain. The business was founded in 1955 as a door-to-door sales operation by Margaret and Philip Isely and has expanded its family business values across 164 stores in 21 states.
The company generates the majority of its revenue from grocery products and dietary supplements, with the rest from body-care and pet-care products.
With a $234M market cap, this is considered a “small value” stock and is only covered by one other analyst on Wall Street.
The company is trading below its 5-year averages on 0.22 P/Sales, 1.51 P/Book, 5.95 P/Cash Flow and EV/EBITDA 9.6x.
After dropping 27% this year, we think there are too many positive attributes to pass up.
From 2017 to 2021, the number of stores increased by 15% and income by +37%, with conservative debt levels.
We think the biggest driver of future growth is in the company’s private label line.
Look at the recent trend in private labels provided by Nielsen:
Natural Grocers-branded products made up 7.5% of total sales compared with 7.1% in the fourth quarter of fiscal 2021.
The company introduced 41 new products in FY 2022 after introducing 185 new products during FY 2021.
We think the success of the private label is not about reinventing the wheel but simply applying what has worked for other grocers.
A successful implementation could boost profitability, differentiate themselves & increase customer loyalty.
According to IRI, grocery food prices are now 14.9% higher compared to last year.
As budgets tighten during periods of economic uncertainty or rising inflation, consumers often turn to private label products to save money.
We are expecting the private label brands to exceed 10% of total sales over the next year which will boost net margins significantly.
Another competitive strength is its reputation in the natural and organic products. This is a large and growing segment of the U.S. food industry.
There is also the increase in dividends and special dividend announced from latest earnings bringing a total yield of 3.87% and the company trading ex-dividend tomorrow.
Dividend-paying stocks provide a way for investors to get paid during rocky market periods, when capital gains are hard to achieve.
They may provide some hedge against inflation, especially when they grow over time.
Final Word
Thank you for reading and I am grateful and humbled to be able to learn, grow and invest alongside you at Tuttle Ventures. Vision, Courage and Patience leads to successful investing.
Don’t forget to follow Tuttle Ventures on Twitter, LinkedIn or Instagram.
Check out the website or some other work here.
Best,
Darin Tuttle, CFA
NOTE - This is not investment advice. Do your own due diligence. I make no representation, warranty or undertaking, express or implied, as to the accuracy, reliability, completeness, or reasonableness of the information contained in this report. Any assumptions, opinions and estimates expressed in this report constitute my judgment as of the date thereof and is subject to change without notice. Any projections contained in the report are based on a number of assumptions as to market conditions. There is no guarantee that projected outcomes will be achieved. Unless there is a signed Investment Management or Financial Planning Agreement by both parties, Tuttle Ventures is not acting as your financial advisor or in any fiduciary capacity.