Need to Know: This portfolio has outpaced the S&P by a factor of four this year, and here are its best stock picks

“Granny shot” stocks.


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Our call of the day offers up stock ideas from a portfolio that has returned 34.1% year to date, versus 9.4% for the S&P 500. The so-called “Granny Shots” portfolio from Fundstrat Global Advisors gets its name from National Basketball Association legend Rick Barry, who shot free throws underhanded, “granny style,” for a career percentage of around 90%.

As Fundstrat founderThomas Lee explains, the “Granny Shots” portfolio is about “the best of the best” of their portfolios — stocks that have an attractive long-term thesis, though at times gain traction slowly, therefore require patience. Since its inception in January 2019, the portfolio has been beating the S&P by 2,470 basis points.

Note, that the granny portfolio has gotten a boost from some of those all-star tech performers this year — Apple, Alphabet
GOOGL,
+0.15%
,
and Microsoft
MSFT,
+0.65%
.

Fundstrat rebalanced the portfolio for the third quarter to add five new names and deleting six. Lee highlights these 35-year charts to illustrate how these stocks might be ready for a revival. Among the new additions is semiconductor equipment maker KLA Corp.
KLAC,
+2.51%
.

im 244033?width=620&size=1

Fundstrat/Bloomberg

Also included is global media group Omnicom
OMC,
-1.10%
,
which Fundstrat notes has suffered some big “headwinds” from the pandemic this year. Another pick is WW Grainger
GWW,
-1.15%
,
an industrial that plays into the idea of an economic rebound:

im 244034?width=620&size=1

Fundstrat/Bloomberg

They also added chip makers — Intel
INTC,
-0.09%
,
which appears to be “shaking off its 2020 setbacks,” and Qualcomm
QCOM,
+0.60%
,
which seems like it is “waking up from a 20-year slumber.”

im 244035?width=620&size=1

Fundstrat/Bloomberg

As for those leaving the portfolio, online travel group Booking Holdings
BKNG,
-3.47%
,
multinational Emerson Electrics
EMR,
-0.99%
,
hardware and software company HP
HPQ,
-0.75%
,
automotive parts supplier BorgWarner
BWA,
-1.19%
,
fertilizer maker CF Industries
CF,
-0.23%
,
and consumer goods group Procter & Gamble
PG,
-0.19%

are out.

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