2014 was the first year for my Stocks Under $20 portfolio and it was a rough one to start. I attempted to build up the $100,000 portfolio by adding stakes in small companies that traded under $20. What quickly happened was an overallocation to several names and sectors that saw hard falls in the second half of the year.

Examples of this include Glu Mobile, the company with hits like Deer Hunter, and the Kim Kardashian game. I have since scaled back on this name, but continue to hold a large stake believing in the long term success of the small mobile gaming company. Another example was getting into some sectors late, like oil exploration and NFC technology to benefit Apple’s new initiatives. This doesn’t mean I have sold those names as the long term benefits are there, however in the long run I likely paid a higher starting price then what was needed.

With the portfolio now close to being fully invested, the new picks will be more precise and likely represent better weightings going forward. That has already been demonstrated with the portfolio starting to pick up going into 2015.

Take for example, two stocks that saw double digit increases this week. ELOS and ZEP were two small holdings of this portfolio that most investors have never heard of. After this week’s moves and likely analyst coverage, the names are ready to continue moving. Because you weren’t a subscriber you missed out on these names that are now up 11% (ELOS) and 5% (ZEP).

The real winner of the portfolio has been Advaxis (ADXS). This small biotech company was added to the portfolio in 2014 with a strong pipeline and several huge markets. I sold a partial stake in this company for a gain of 196%. The rest of the position is now playing with the house’s money, or pure profit after taking out our initial investment. Shares continue their run this week and are now up 241%.

In fact, the Advaxis success has also led to a better representation by biotech companies in the Stocks Under $20 portfolio. In December, I shared my latest biotech bet that has a major 2015 catalyst coming and a strong pipeline. The company also already has approved drugs so it is not as risky as some of the penny stock biotech companies. Later next week I will sharing my next biotech stock pick that has treatments for two huge markets and could significantly change care for both. The stock trades for less than $8 per share, less than half of its 52 week high.

The other sale I made in 2014 was Dreamworks Animation (DWA). I bought shares when they were under $20, which was a very short window, and then flipped them when they crossed the $25 mark, as defined as the mandatory exit point for this portfolio. In less than two months, investors saw a 33.8% gain from the Dreamworks Animation sale.

The portfolio has made three sales since its inception. Two were winners (ADXS, DWA) and one was a loser (GLUU). The average gain on the trades was 95.2%. Year to date, the fund is up 1.8%. As mentioned above, the fund struggled in the beginning and is still down 6.6% over the last 365 days. I believe 2015 will be significantly better and remain committed to bringing you the best picks of stocks trading under $20 to increase profits and lower cost basis.

So if you’re inclined to add this service to your financial news and stock pick sources, enter code RESOLUTION upon checkout for 50% savings on your first month. Remember all Marketfy plans come with a 30 day money back guarantee. But I know once you signup you won’t want that refund.

Happy trading,

Chris

Stocks Under $20