Wayman Value Investing May 2024 Portfolio

Take a look at our current holdings

May 2024 Outlook

In the midst of the 2024 stock market rally, investors are facing a mixed landscape characterized by the Federal Reserve's cautious stance on interest rate cuts and lingering concerns about inflation. The S&P 500 experienced a 4.1% decline in April amid uncertainty surrounding the Fed's next move and signs of slowing economic growth.

Interest rates and inflation continue to dominate investor sentiment, with the Federal Open Market Committee opting to maintain rates at historic highs. However, market expectations for rate cuts have dwindled, raising concerns about the impact on economic growth. Inflation, as measured by the consumer price index, remains elevated at 3.5% year-over-year, exceeding the Federal Reserve's long-term target.

The recent slowdown in GDP growth and the inversion of the U.S. Treasury yield curve have further fueled fears of an impending recession. Despite these challenges, the labor market remains robust, with strong job additions and wage growth.

First-quarter earnings season has delivered mixed results, with some sectors outperforming while others struggle amid tight credit markets. Technology stocks, in particular, have faced scrutiny, with notable declines following earnings reports from industry giants like Intel and Meta Platforms.

While the market outlook remains uncertain, opportunities for selective investing persist. With a cautious eye on economic indicators and potential policy shifts, investors can navigate market volatility and capitalize on opportunities that emerge amid the uncertainty.

User Guide - Tracking the Spreads

What are spreads, and why should you care? I believe that tracking spreads is essential for making informed investment decisions. Each month I categorize stocks into tiers based on the spread between their calculated value and market value.

Here’s how it works:

STASH: This tier includes stocks with the largest spreads. These are the hidden gems that offer significant potential upside. Based on my valuation, now is the perfect time to capitalize on their undervalued status.

GATHER: Stocks in this tier have a substantial spread, but not as significant as those in the Stash tier. They still offer attractive opportunities for investment, and I recommend considering them for your portfolio.

STORE: The Store tier consists of stocks with modest or tightening spreads. While they may not have as much potential for immediate growth, they still hold value and can contribute to a balanced portfolio. Wayman holds these stocks, but I am not actively buying additional shares this month.

CACHE: In this tier, stocks have narrow or no spreads, indicating that their market value aligns closely with Wayman’s calculated value. It may be time to consider exiting positions in these stocks and reallocating your resources.

Categorizing stocks based on spreads helps you identify stocks with the greatest potential for growth. I believe in capturing maximum upside while minimizing potential losses, and Wayman’s tiered system allows you to prioritize your investment decisions.

Model Allocation

For the purpose of third-party portfolio tracking and validation we use the following model portfolio allocation:

• 65% invested in Stash tier stocks

• 30% invested in Gather tier stocks

• 5% invested in Store tier stocks

The Wayman portfolio is tracked and audited by Hulbert Ratings, which has been rigorously tracking the real-world performance of investment advisory newsletters for over 40 years. You can follow our performance here.

Wayman Value Investing Portfolio - May 2024

STASH

• ATKR - Atkore

• BCC - Boise Cascade Company

• CI - The Cigna Group

• CNC - Centene

• CRC - California Resources Corporation

• EXPE - Expedia Group

• KBH - KB Home

• KNSL - Kinsale Capital Group

• MCK - McKesson

• PATK - Patrick Industries

• SYF - Synchrony Financial

• THO - Thor Industries

• TPH - Tri Pointe Homes

• TRV - The Travelers Companies

• YELP - Yelp

GATHER

• ALL - The Allstate Corporation

• APAM - Artisan Partners Asset Management

• AXP - American Express Company

• CE - Celanese

• CORT - Corcept Therapeutics

• EVR - Evercore

• HIG - The Hartford Financial Services Group

• JPM - JPMorgan Chase & Co.

• PGR - The Progressive Corporation

• SAH - Sonic Automotive

• TMHC - Taylor Morrison Home Corporation

• TOL - Toll Brothers

• VCTR - Victory Capital Holdings

• WGO - Winnebago Industries

STORE

• ABBV - AbbVie

• ALSN - Allison Transmission Holdings

• ARCB - ArcBest

• ASO - Academy Sports and Outdoors

• BLDR - Builders FirstSource

• CACI - CACI International

• CAH - Cardinal Health

• CPAY - Corpay Inc

• CTSH - Cognizant Technology Solutions

• CVS - CVS Health

• FOX - Fox Corporation

• GEF - Greif

• GL - Globe Life

• LEN - Lennar Corporation

• OBDC - Blue Owl Capital Corporation

• OC - Owens Corning

• PRGS - Progress Software Corporation

• SAIC - Science Application International Corporation

• SF - Stifel Financial

• TROW - T. Rowe Price Group

• URBN - Urban Outfitters

CACHE

• MTZ - MasTec (Sell Recommended May 7, 2024)

• SFM - Sprouts Farmers Market (Sell Recommended May 7, 2024)