Yesterday was a significant day for the SIA Hypothetical NASDAQ 5-Stock Model as an alert triggered for one of our favored positions, Broadcom (AVGO). Initially, 19,017 shares of AVGO were purchased on June 6, 2023, at a price of $868.52, well ahead of its 10-1 stock split. According to our rules-based methodology, we continued to hold AVGO until yesterday because it maintained its position in the SIA NASDAQ 100 Index Report throughout the period, proudly sitting among top alpha stocks like Nvidia. Similar to Nvidia, which departed the SIA NASDAQ 5-Stock Model last month, AVGO has also moved down the matrix, losing its necessary SIA relative strength ranks. Consequently, it was sold at $139.11 ($1,391.10 pre-split) for a 60% capital gain. The stock selection process then recommends replacing it with the highest-ranked stock in the report that has an SMAX score of 6 or better. We are excited to announce that we are adding Intuitive Surgical, Inc. (ISRG), a $170 billion American biotechnology company. ISRG develops, manufactures, and markets robotic products designed to improve clinical outcomes through minimally invasive surgery, notably with the da Vinci Surgical System. ISRG is part of the SIA NASDAQ 100 and SIA S&P 500 Index Reports. Now in position #2 on this powerful SIA Relative Strength Report, ISRG has emerged as the new favorite of the market with a 1-year return of 60.75%. However, this may just be the beginning. The comparison chart between the old favorite AVGO and ISRG shows that while AVGO outperformed for five years, our intelligence platform suggests that this relationship has reversed.
This tactically active investing strategy, designed for advisors and suited for 6-18 month sensitivities, continues to outperform our SIA Model Universe. Elite advisor practices have used this strategy for the past 10 years, with trades emailed to teams for execution. Portfolio managers also utilize this methodology in the creation of ETFs, such as the SIA BMO North American Equity ETF, and Mutual Funds. The focus on concentrated portfolios with extremely high relative strength continues to drive returns, with the SIA Hypothetical NASDAQ 5-Stock Model currently showing a remarkable 29.21% CAGR compared to the benchmark NASDAQ Composite Index’s 15.60%. This model's return is up 44.89% YTD, versus 12.48% for the benchmark, demonstrating substantial outperformance across all time periods. Despite this turbo-charged performance, the Model portfolio has a Beta of 0.92 compared to the broad market’s 1 and the NASDAQ Composite’s 1.11. All these factors contribute significantly, with the model's performance since inception standing at 1,900% versus the NASDAQ Index’s 445%.
This underscores the power of compounding with these rules-based, concentrated, and extremely high SIA-ranked companies. Stock Selection Process: FOR ADVISOR USE ONLY - The hypothetical stock selection process recommends the top 5 relative strength-ranked names from the SIA NASDAQ 100 universe. Once a holding is sold, it is replaced by the highest-ranked stock from the Relative Strength rankings with an SMAX score of 6 or higher. The strategy will sell any investment that moves into the Neutral zone of the report if it has an SMAX score of 5 or less, or if it moves to the Unfavored zone.
Disclaimer: SIACharts Inc. specifically represents that it does not give investment advice or advocate the purchase or sale of any security or investment whatsoever. This information has been prepared without regard to any particular investors investment objectives, financial situation, and needs. None of the information contained in this document constitutes an offer to sell or the solicitation of an offer to buy any security or other investment or an offer to provide investment services of any kind. As such, advisors and their clients should not act on any recommendation (express or implied) or information in this report without obtaining specific advice in relation to their accounts and should not rely on information herein as the primary basis for their investment decisions. Information contained herein is based on data obtained from recognized statistical services, issuer reports or communications, or other sources, believed to be reliable. SIACharts Inc. nor its third party content providers make any representations or warranties or take any responsibility as to the accuracy or completeness of any recommendation or information contained herein and shall not be liable for any errors, inaccuracies or delays in content, or for any actions taken in reliance thereon. Any statements nonfactual in nature constitute only current opinions, which are subject to change without notice.
