Daily Press (Sunday)

The Bunny Portfolio returned 44% in the past year

- John Dorfman John Dorfman is chairman of Dorfman Value Investment­s in Boston. His firm of clients may own or trade securities discussed in this column. He can be reached at jdorfman@dorfmanval­ue.com.

“Still going.”

That was the punchline in the Energizer battery commercial­s, featuring the Energizer Bunny, which kept going long after you would have expected it to stop.

It’s also the idea behind my Bunny Portfolio. This hypothetic­al portfolio contains companies that have averaged 25% profit growth in the past five years, yet have stocks selling for 12 times earnings or less.

That can only happen if investors think the good times are over, or soon to end. My theory is that people are poor predictors of the future, so some of these stocks may be “still going” for another year or more.

The Bunny Portfolio contains 10 stocks, chosen by formula — the five with the fastest-growing profits and the five with the lowest ratio of stock price to per-share earnings.

I compiled my first Bunny Portfolio in 1999, and have done one almost every year since. The average 12-month gain on the Bunny stocks has been 14.99%, compared to 9.83% for the Standard & Poor’s 500 Total Return Index over the same periods.

Bear in mind that my column results are hypothetic­al and shouldn’t be confused with results I obtain for clients. Also, past performanc­e doesn’t predict the future.

Fourteen of the 22 Bunny Portfolios have been profitable, and 11 have beaten the index.

Here are the 10 new selections from the Bunny paradigm, listed in alphabetic­al order.

Academy Sports

Academy Sports and Outdoors Inc. (ASO), based in Katy, Texas, sells hunting, fishing and sports equipment, plus related clothing. Earnings have grown fast in the past five years but dipped a bit in the past year.


The world’s largest lithium producer, Albemarle has mines in the U.S., Chile and Australia. It is also a major producer of bromine. Lithium is a key ingredient in electric-car batteries, and bromine is used in flame retardants. The company has posted a profit in 14 of the past 15 years.


The second-largest grocerysto­re chain in the U.S. with more than 2,200 stores in 34 states, Albertsons Co. Inc. (ACI) is based in Boise, Idaho. Kroger Co. (KR) plans to acquire Albertsons, but the plan isn’t certain to be approved by regulators, so the stock trades well below the takeover price.

Asbury Automotive

Asbury Automotive Group Inc. (ABG) is an aggregatio­n of car dealership­s. Recently it ran 138 new-car dealership­s, seven usedcar dealership­s and 32 collision center. Based in Duluth, Georgia, it operates in 14 states.

Boise Cascade

Also based in Boise, Idaho, is Boise Cascade Co. (BCC), which supplies engineered wood products, lumber and wood panels. It has an 11-year profit streak going. Profits in 2023 declined, so skeptics think the good times no longer roll.


BrightSphe­re Investment Group Inc. (GSIB), based in Boston, describes itself as a “multi-boutique asset management company.” Paulson & Co, run by the famed hedge fund manager John Paulson, owns 21.6% of the stock and Paulson sits on BrightSphe­re’s board.


Cal-Maine Foods Inc. (CALM), from Ridgeland, Mississipp­i, is the largest U.S. egg producer.

The egg business is volatile, with avian flu affecting flocks some years and with the price of corn (chicken feed) fluctuatin­g. In good times, the stock offers a high dividend yield, currently 8.3%.

CapStar Financial

Based in Nashville, Tennessee, CapStar Financial Holdings Inc. owns CapStar Bank, which serves Nashville and several smaller cities in Tennessee. It has few fans on Wall Street. Only five analysts cover it, and none rates it a buy. Earnings have fallen in the past few quarters.

Cheniere Energy

Cheniere Energy Partners LP (CQP), with headquarte­rs in Houston, operates liquid natural gas terminals. Liquefacti­on allows the export of natural gas, and exports have been growing rapidly. I like many things about Cheniere, but am worried by its long-term debt, which exceeds

$15 billion.

Consumer Portfolio

Boasting a 79% earnings growth rate but selling for only five times earnings is Consumer Portfolio Services Inc. (CPSS). Based in Las Vegas, it specialize­s in car loans to consumers with credit problems, short credit histories or low income. Warning: Debt here is high.


Back in the early 2000s, Crocs shoes were a craze, and Crocs Inc. (CROX) stock was a hot item when it went public in 2006. Today, despite a 31.7% earnings growth rate in the past five years, the stock is unpopular, selling for less than 10 times earnings.

Last year

The past year was a good one for the Bunny Portfolio. From Dec. 12, 2022, through Dec. 8, 2023, it returned 44.35%, compared to 17.31% for the Standard & Poor’s 500 Total Return Index.

The best returns came from M/I Homes Inc. (MHO), up 154%, and Matson Inc. (MATX), up 65%. The former is a homebuilde­r, the latter an ocean shipper. The worst performer was Azenta Inc., a supplier to the biotech industry; it was down 5%.

Disclosure: I own Cal-Maine Foods and Matson personally and for most of my clients. I own call options on Albemarle in a hedge fund I run.

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