Farewell To DOM

I've owned Dominion Resources Black Warrior Trust (DOM) since November 2007. It was my Stock Of The Month just 2 months ago. But in a first half of 2011 that has been mostly foul-ups, bloopers, and blunders, I sold it all on Friday after it hit an all-time low closing price on Thursday. I had set a triggered sell when I last bought it, thinking it would never actually be needed. As DOM sunk lower and lower in recent weeks, I still thought it would bounce back. It didn't - the capital losses were overwhelming the dividend, and I had to admit defeat and move on.

Fortunately, DOM was still around 5.5% of my portfolio, so I had a great opportunity to fill some long-standing orders:

• Bought enough Baidu (BIDU) to get back to where I was before, thereby (as best as is possible) undoing my worst stock sale ever;
• Bought enough Intuitive Surgical (ISRG) to get back to where I was before as well; and
• Used the remainder to buy Google (GOOG). I'd like to say that I got in before their fantastic last-quarter results were announced and the stock jumped 13%, but of course, I didn't.

Those are, as the reader might notice, three non-dividend-paying stocks. I feel that the chance to scratch some items off my to-do list outweighed the need to immediately replace DOM with a similar stock. I do have a few large dividend-paying candidates in mind though, and will be buying them as part of my normal monthly investments going forward.

Stock Of The Month: UA

At the halfway point of 2011, things aren't looking so good.

My portfolio is trailing the S&P 500 by nearly 10%. This is due to both owning seemingly good stocks that went terribly wrong, and also buying stocks that had no chance to be good in the first place.

So it's time for a comeback...a "game-two-of-the finals-and-the-opponent's-star-player-held-his-follow-through-a-little-too-long-on-a-corner-three" order of comeback. It's not going to be easy. But I'll try to do it the only way I know how: one stock at a time.

Under Armour (UA)

Positives:

Excellent revenue growth (36%) and earnings growth (69%).

Undervalued market cap ($4B) vs. competitors Adidas ($17B) and Nike ($44B).

Negatives:

Mediocre profit margin (6%), operating margin (10%), ROA (12%) and ROE (16%).

Negative cash flows.

Here's my current portfolio. As always, I believe in all of these stocks - until I sell them.

Apple (AAPL) 11.95%

Baidu (BIDU) 8.94%

Southern Copper (SCCO) 7.35%

Google (GOOG) 5.82%

Dominion Resources Black Warrior Trust (DOM) 5.75%

Annaly Capital Management (NLY) 5.52%

Ace Limited (ACE) 4.33%

Apache (APA) 4.23%

American Software (AMSWA) 3.75%

Hugoton Royalty Trust (HGT) 3.69%

BP Prudhoe Bay Royalty Trust (BPT) 3.68%

Intuitive Surgical (ISRG) 3.36%

Blackstone (BX) 3.01%

Cherokee (CHKE) 2.86%

DuPont (DD) 2.63%

Intel (INTC) 2.54%

Prospect Capital (PSEC) 2.49%

McDonald's (MCD) 2.49%

Vodafone (VOD) 2.41%

The Distressed (ERTS, ESI, JSDA, LZB, MMI, MSI, PCS, RVR, STEC, WFC) 2.36%

F5 Networks (FFIV) 2.15%

BreitBurn Energy Partners (BBEP) 2.05%

American Capital Agency (AGNC) 1.83%

Under Armour (UA) 1.69%

Chimera Investment (CIM) 1.62%

Netflix (NFLX) 1.33%