Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Dell Inc. (DELL), Arkansas Best Corporation (ABFS), Skullcandy Inc (SKUL): One Person’s Trash Is Another Person’s Treasure Portfolio

Dell Inc. (NASDAQ:DELL)Last November, I announced my intention to create a portfolio of 10 companies that investors had effectively thrown away and given up on, in the hope of showing that deep-value investing, and contrarian thinking, can actually be a very successful investing method. I dubbed this the “One Person’s Trash Is Another Person’s Treasure” portfolio and, over a 10-week span, I highlighted companies that I thought fit this bill, and would expect to drastically outperform the benchmark S&P 500 over the coming 12 months. If you’re interested in the reasoning behind why I chose these companies, then I encourage you to review my synopsis of each portfolio selection:






Arkansas Best

Arch Coal




Now, let’s get to the portfolio and see how it fared this week:

Company Cost Basis Shares Total Value Return
Exelon  $31.25 31.68 $977.01 (1.3%)
QLogic $11.46 86.39 $969.30 (2.1%)
Dendreon $5.97 165.82 $772.72 (21.9%)
Dell  $13.37 74.05 $1,015.23 2.5%
Staples $13.48 73.44 $1,233.06 24.6%
Arkansas Best $10.83 91.41 $1,791.64 81%
Arch Coal $7.03 140.83 $552.05 (44.2%)
Skullcandy $6.71 147.54 $758.36 (21.9%)
Orange $11.64 85.05 $830.09 (16.2%)
Xerox $8.16 121.32 $1,197.43 21%
Cash $0.06
Dividends receivable $99.26
Total commission ($100.00)
Original investment $10,000.00
S&P 500 performance 12.6%
Performance relative to S&P 500 (10.6%)

Source: Yahoo! Finance.

This week’s winner
Topping the list this week were shares of Dell Inc. (NASDAQ:DELL), which added 8.3%, $1.05, after its board of directors denied Michael Dell the right to change how non-voting shareholders are counted. The board did, however, allow Michael Dell to extend the voting date on the premise that he keep his $13.75/share bid on the table. Dell Inc. (NASDAQ:DELL)’s latest offer to secure a private buyout included a $0.13 per share one-time dividend, and promised shareholders they’d receive their third-quarter $0.08 quarterly payout, as well. Activist investor Carl Icahn continues to refute that Dell Inc. (NASDAQ:DELL)’s offer is a slap in the face to shareholders, and plans to pursue a lawsuit in the state of Delaware in the best interests of shareholders.

This week’s loser
Taking it on the chin hardest this week was trucking company Arkansas Best Corporation (NASDAQ:ABFS), which shed 9.6% after it was undeniably confirmed by YRC Worldwide that Arkansas Best Corporation (NASDAQ:ABFS) had spurned its takeover offer. Following Arkansas Best Corporation (NASDAQ:ABFS)’s ratification of its collective bargaining agreement, shares of the company have been on fire. I’m not too surprised to see shares pulling back a bit here, and would expect bottom-line results rather than buyout rumors to drive the stock from here on out.

Also in the news…
Shareholders (like me) of audio accessories maker Skullcandy Inc (NASDAQ:SKUL) had high hopes heading into its second-quarter results last week. To put it mildly, its quarterly report was ug-ly! Net sales dropped 30%, to $50.8 million, as U.S. sales plummeted 39% with retailers choosing to purchase and carry less, and competition increasing. Thankfully, tight cost controls under new CEO Hoby Darling resulted in a breakeven bottom-line, which was much better than the $0.03 loss per share expected by Wall Street. Ultimately, this is an ongoing turnaround story, and I’m not planning to give up my shares. Skullcandy Inc (NASDAQ:SKUL) still has a shot at dominating the lower-end audio market, and that seems like a pretty safe bet, with the company valued at just a fraction over its book value.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.