Singular Research List is 17% ahead of the S&P 500 Through April
April was the strongest month yet for the Singular Research List. While the S&P 500 declined 2.96% , our stocks returned a positive 5.15%, for 8.11% outperformance. Not surprisingly in a down market like April, our two short positions helped power our results, but the magnitude of the moves caught even us by surprise. Travelzoo (TZOO:SELL) declined 44.3%, leaving it much closer to our $23 price target. Given that even our $23 price target assumes very aggressive growth assumptions, there may well be room to move down to the single digit midget range on this one. NVE Corp (NVEC:SELL) was another great short call this month, declining right through our already lowered price target of $14 and returning 36.9% performance for April. Our analyst, Sean O'Neill, is evaluating his ratings and price target in light of the company's recent Q1:05 earnings report. Great call Sean!
But even in this down market, many of our long positions held up strikingly well. Iris International (IRIS:BUY) returned 30.8% in April driving by phenomenal Q4:04, and Q1:05 results, raised guidance and an initiation by one of our competitors. IRIS is now up 124% from where we initiated on it last year. A newcomer to the list added just this month, Duratek Inc. (DRTK:BUY) returned 20.9% on better than expected earnings and strong growth prospects. Finally, Acme United (ACU:BUY) continued to show impressive price gains, up 13.3% for April on strong earnings reports, and a more aggressive stock buyback program. Acme has been in our list for some time and has returned 78% since initiation last year.
As always, there were some disappointments, Parlux Fragrances (PARL:BUY) declined 22.2%, as momentum players abandoned the stock after its huge run up from last year through March of this year. Nothing fundamentally has changed with the firm, and we would view the recent pullback as an excellent buying opportunity. Our price target implies 95% upside. Since we initiated on PARL last year, our recommendation is up 103%. Adams Resources and Energy (AE:BUY) also declined sharply down 22.1% in April. Our $30 price target implies 85% upside on AE.
As we have stated from the beginning, we expect the major indices to return mid single digit type performances on average over the next couple of years as valuations, in many cases, are stretched. In this type of environment, we expect the market to move sideways, much as it has. Investors are leering from one fear to the next. Is inflation the problem? Is it stagnant economic growth? High oil prices? Declining dollar? Trade deficit? Budget Deficit? The bigger issue is a world awash in savings that is driving real interest rates down and raising the value of every asset class. Real interest rates in the U.S. as indicated by the TIPS market hover around 2% down from 4% in recent years. Overseas, real yields are similar. Eventually, this pool of savings looking for more places to invest will work its way down to the venture capital and private equity markets spurring new business creation. Signs abound already, in fact, that this is happening. In a market such as this one, successful stock picking will be more valuable than ever. The small cap market remains one of the areas where the return to diligent research is the highest, and we are delighted to discover these great companies before they hit the radar screens of larger firms. Year to date, our research list has beaten the S&P 500 by 17%. We hope to continue this streak through the balance of the year.
Subscribers will find much more inside. Why not sign up for a free one month trial? If you believe as we do, that most asset classes are overvalued, and we're in for mid single digit type returns on the major US indices, then successful stock picking will become even more crucial for market beating returns. Let us help you to a prosperous 2005. Happy trading.