Stock Trak Portfolio Analysis

Subject: Business
Type: Profile Essay
Pages: 9
Word count: 2443
Topics: Business Ethics, Finance, Management, Marketing


This research provides information on the bfleeks portfolio created, the strategies employed in acquisition of the various securities, some criticism on some aspects of weakness about 6 transactions /asset acquisitions that make up the portfolio, the best trade in consideration of a non financial benefit but rather a much more sensitive issue which bears an advantage, externalities that affect the value of the portfolio and the specified effects. The study into the portfolio aspects is  finally  wrapped up through a risk adjusted return /performance that is expected of the portfolio based on relevant assumptions/considerations ,the adjusted/obtained value of  beta in relation to the performance of the market.

Portfolio Summary

The portfolio acquisition was financed through a loan which had been partly serviced with a balance of about $785,916.29 and an interest amount of $702.26.The interest earned was $332.09 which made the net interest income to be about $370.17 which was a gain for the firm. The market value of long term investments was valued at 1,290,606.24 with a complimentary interest  earned on bonds of $7,256.84.The actual portfolio value was $504690.05 as a result of 24/176 trades made which illustrated that there was a huge potential in the portfolio holding. The portfolio had a return of 1.48% which is less than the market return. I n comparison to the (market assumption), the SPY ETF % return of 1.92% or the assumed S&P 500 index or the Dow Jones Industrial Average (DJIA) represented by a market return range of 2.7% and 2.05% ,the portfolio had a material underperformance which essentially means it would have been much more profitable to invest in money market funds which would result to higher returns /margins.

The portfolio still had a significant purchasing power represented by the $ 360,091.92 buying power which is assumed to be held in cash. Therefore, there was a large amount of cash reserve held by the firm which would have been converted to higher return gaining assets. The firm may have had a high liquidity position but the investment options had a higher return with careful selection of investments. Generally, the portfolio had gained in value from a cash value of $500,000 to the current portfolio value of $504,690.05. 


Diversification strategy

The firm has a diversification strategy that was used in the acquisition of stock from the different companies, bonds, futures and options. As indicated in the site ,stocks or market equities invested in were in the following companies: Capital one ,Bluebird, Wal-Mart, PG & E ,American express, Alphabet inc, Bit coin, Shoe Carnival, Citigroup, Macy’s, J.C Penny, Tesla, Best buy, Amazon and Face-book Inc. These companies form the portfolio invested in with a diverse network of companies with different stock values ,different growth levels and  in different industries .This strategy has the benefit of reduced risk as well as the increased  probability of maximization of returns of the total portfolio which is consistent with the financial management principle of maximization of shareholder wealth. The essence of such a strategy is to ensure that the firm has minimal risk and has gains in virtually many industries in the  market. The bfleeks portfolio is ranked second with a value of $ 504,690.05 which is largely made up of long term investments made. 


Some weaknesses observed in the portfolio involved the limitation to only long selling /going long of securities and no short selling or going short allowed. The other aspect that might be considered as a weakness was a higher interest charged compared to the interest gained which meant the portfolio had a net negative interest income.

Industries Recap/Transactions

Capital One Corporation

The firm invested in Capital Corporation on 5th December 2017, a financial services firm which had a well researched opinion on the position of SMEs and small business with the increased optimism and improved overall climate expected for business growth with projected incremental financial positions for the small businesses which was a higher outlook in quite sometime. The past 6 months prior to early  November had a reported increased growth in sales revenue by up to 47% of the total small scale businesses  by a 10 point differential which represented positive growth. More small scale businesses had been observed to be concerned about cash flow and technological upgrades which was also a positive indicator for growth. Loosened federal as well as tax regulations have provided a suitable environment for growth of the sme’s. (Maclean, 2017)These aspects projected potential incremental revenue and profits for the firm if the decision t invest in Capital One Corporation thus, the subsequent investment. The investment in capital one was also backed by the introduction of the Critical Stack, a container platform that enabled companies to have cloud tech infrastructure which facilitated company operations through computing infrastructure in November 

Capital one and America express

The share prices for Capital One grew from about $92 on the 6th of November to about $94 to $95 per share by 5th of December 2017.Capital one experienced increased demand which subsequently gave way to specifics such as increased interest income by 10.8% for the 3 month period ended 30th September of 2017.The earnings per share also increased with an expected earnings per share of $8.49 in January 2018.

American express

The firm invested in America Express on 1st and 5th of December 2017.American express had a share price of slightly above $96 on 6th November 2017 which grew to $98.71  by the 4th of December  2017.Events within the one month duration that have facilitated increased value for American express include the introduction of the Amex advance service that was useful to advertizing, travel and generally service companies ,the introduction of Block –chain technology in the business process enhanced the payments from business to another, the boosting of investor confidence through informational publicity awareness through moves such as the management at American Express attending public conferences and the highlighted firm performance, the declaration of the quarterly dividend  on November 28th,the involvement of millennial has boosted investment and firm value. (Business Wire , 2017)The social responsibility aspect by American express to give a hand /aid to the hurricanes that have occurred in Puerto Rico, Texas and Florida has le to increased popularity and increased firm value.  The  interest income for American express by 2017 September had increased by 27.10 and the basic earnings has also increased  by 24.79% .The expected EPS for the January 2018 forecast is $ 1.47 which shall mark a higher improved performance compared to the last financial period. (GlobalNewswire , 2017)

Blue bird Inc (BLUE) 

The firm invested in Blue bird bio Inc on  5th December 2017.Blue bird is a clinical medicine product/services firm that produces various lines of gene therapy for chronic disease. The firm has a current market equity value of $162.65 which is an increase from the value of $145 about one month back making it a very ideal investment made by the firm. Other positive contributory aspects to the firm’s value included the following: the treatment of the first patient in relation to the LentiGlobin study, phase 3 which involved patients with TDT with a specific genotype. This breakthrough has been a source of positive reaction in the market which has facilitated the growth in popularity and future expected positive growth by the firm thus the investment. Other aspects include the bb2121 Anti-BCMA CAR-T cell therapy breakthrough recognition by FDA, the expected growth pattern expected for the future period, multiple supply agreements and the acquisition of the North Carolina manufacturing point to increase the firm’s ability to create more gene therapies has increased the investment potential and value for the firm. (BusinessWire , 2017)


The firm invested in Tesla on the 24th of November .Tesla had a share price value that was marked at about $303 one month back that underwent a series of rise and fall values to $303.7 as of December 6th 2017.This value was appreciated by the launch of the world’s largest battery in Australia that was powered by renewable wind energy, a clean source of energy that is a desired orientation of the global energy faculties. The source of energy a lithium ion battery which stored the renewable energy was connected to the Australian state grid, the benefit  from EV tax allowable options (tax credits) slightly favored the increase in the  firm’s value thus the increased investments The firm however had some negative aspects that included the tax concerns, the removal from the subsidies  list by Germans, charging burdens in trucks makes it uneconomical for long distance carriages, the discredit by general motors  through the sale of its model (Bolt),the class action suit against Tesla  reminder by the Vincent Law Offices created some negative publicity for the firm, the volatile future aspect in European markets for Tesla and the general uneconomical mega charging network as claimed by various reports. (Seekingalpha, 2017)These negative aspects have contributed to the decreased value of the firm thus the overall net slight increase in the value of stock of the firm.

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Amazon was made part of the portfolio on the 17th of November 2017 .Amazon stock value increased from about $1120 in November 6th 2017 to about $ 1141.57 on December 5th 2017.This has been a result of a sharp increase in the stock value from November 20th  to 27th which later dropped sharply to 1141 by December 5th.The increase in value of the company’s stock has been attributed to the increased orders from Australia after opening up the new markets in Australia, retention of the brick and mortar retain investments, the inclusion of hand made artifacts from various markets on the Amazon business platform, the potential partnership with Ad holdcos to create more business through Amazon’s platform, the inclusion of participation results in relation to exchange offer and the inclusion of whole sale food in  markets has increased business, the corporation with Ever-core amongst other companies (Alphabet and Facebook) and the launch of the Prime Amazon video application .Damaging publicity included the cancellation of the license application of the wholesaler drug sellers, the ruling by the EU court that luxury brands were to keep off Amazon or withdraw their products from Amazon meant less business for Amazon.


The firm invested in the equity of Facebook on the 17th of November 2017.Facebook Inc had a stock market value of about $180 in November which has decreased to a current value of $173 on December 6th 2017. (StockTrak , 2017).the overall decrease in value has been attributed to the  increased competition from other social media sites, the eliminated donation fees that were meant for non-profit organizations substituted by the new expected launch of an annual $50 M Facebook Donation fund . (StreetSignals, 2017)The listing of Facebook as one of the top picks by JPMorgan, the investment firm, illustrates that the firm stock is low and is a good investment option with regard to the new future as the firm’s value is expected to shoot up. Morgan Stanley another financial firm points to how the firm can eventually break even. Other potential growth indicators are the large spending on sports streaming, the launch of Messenger kids for small kids and the corporation with Ever-core ISI alongside Alphabet and Amazon.

Best trade

The firm’s best trade would be the investment made in Tesla from the perspective of the investments in the renewable energy segments. The world is advancing towards a clean energy outlook and more companies in different parts of the world are being subjected to global pressure of environmental considerations being incorporated. The reduction in environmental pollution in industries and sustainable production process in the world at large has been an initiative that has been facilitated/ funded by various global parties. Thus, the investment by the firm in Tesla as part of its portfolio not necessarily because of the returns made but largely due to the use /production of renewable energy (wind energy) through the launch of the largest wind powered battery in the world became a big step for the firm.

Externalities that have affected the portfolio


The occurrence of the hurricanes and the help out initiative by America Express Company helped increased the firm’s value and subsequently the value of the portfolio. This has resulted to an overall increased value.

Renewable Energy/Climate Change considerations

The global increase in environmental considerations has led to the largest, first non renewable energy-powered battery which has been launched in Australia. The investment in the firm has increased the value of the portfolio.

Chronic Diseases/Cancer treatment breakthrough

The treatment of the first patient as part of the medicinal therapies carried out by Blue company has marked a breakthrough in the treatment of certain chronic diseases which also include cancer thus increasing the value of equity of the firm and the overall portfolio value.

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Risk adjusted performance

The risk adjusted performance of the portfolio shall be based on the calculated value of return of the portfolio. Using regression and CAPM we can establish the beta of the portfolio then subsequently determine the weighted average cost of capital of the portfolio

Given return of the portfolio: 1.48%

Market return: 1.92% 

Assumed risk free rate: 1.27%

Using Manual regression

Y=a +bx

Where y and x is the market return for one of the chosen stock

A is the market return  

B is the beta/risk 

Using one of the portfolio stock (BLUE Company) :Stock value increased from $145 to $162.65 within the one month time frame (November to December 2017)

162.65= 1.92% +b(145)


162.63/145= b

1.12=b (Beta)


Using CAPM

 WACC= RF+ β(Market return – risk free rate )

WACC= 1.27% + 1.12(1.92%-1.27%)

WACC= 1.27% + 1.12(0.65%)



Therefore, the adjusted rate of return or the weighted average cost of capital that the portfolio bears in consideration of the assumed factors shall be 2% which is an upward value adjusted or increased from 1.48%


The portfolio is a fairly balanced portfolio in consideration of the equities and securities that are held. The strengths are larger than the weaknesses therefore creating an efficient portfolio. Based on the adjustments made and the adjusted rate of return, the portfolio has string of assets that have a rate of return or WACC of 2% which is higher than the return from the market given. The essence of the return is to indicate whether investments in the different equities or stocks is worthwhile or better than the investment in the market funds .In this case after adjustment of the portfolio’s return ,then it becomes better than making an investment into the market funds. The portfolio is well diversified into 15 companies with a reduced risk level and a high potential for maximization of returns.

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  1. Business Wire . (2017, November 29). Millenials plan to redifine the C-Suite . Retrieved December 6, 2017, from Business Wire website :
  2. BusinessWire . (2017). Bluebird Bio Inc(Blue). Retrieved 2017, from Business Wire website :
  3. GlobalNewswire . (2017, December 4). Research Report identifies companies with renewed outlook-fundamental analysis . Retrieved December 6, 2017, from Global Newswire website : AXP
  4. Maclean, V. (2017, November 9). Small business confidence reaches highest point in five years. Retrieved December 2017, from PRNewsire website :
  5. Seekingalpha. (2017, December 3). Is Tesla’s Mega Charging Network Economically viable ? Retrieved December 6, 2017, from
  6. StockTrak . (2017). Facebook Inc. Retrieved 2017, from Stock Trak website :
  7. StreetSignals. (2017, November 29). Facebook donation fees for non-profits have been eliminated . Retrieved December 2017, from Stree signals website :
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