We’re making three moves in the Portfolio this month. JB Hi-Fi Ltd (ASX: JBH, OTC: None) is joining the Aggressive Holdings.

JB Hi-Fi is an electronics retailer with an expanding business in terms of both product and venue. We’ve recommended JB on several occasions during its strong run since September 2011, without taking the step of adding it to the Portfolio.

A weak start to 2014 on the Australian Securities Exchange (ASX) provides an opportunity to add it. JB Hi-Fi is a buy under USD18.

We have more on JB Hi-Fi in one of this month’s Sector Spotlights.

And we’re moving on from two Aggressive Holdings that broke down under extremely difficult operating conditions, Ausdrill Ltd (ASX: ASL, OTC: AUSDF) and SMS Management & Technology Ltd (ASX: SMX, OTC: SMSUF, ADR: SMSUY).

Both were hit hard by spending cuts, the former by mining, the latter by Australian businesses and government entities.

In last month’s Portfolio Update we noted that we had questions about Ausdrill  and SMS. Management reports on fiscal 2014 first-half results suggest both companies face significant operating headwinds coupled with serious financial hurdles that cast doubt on their ability to consistently generate dividends for shareholders in the short and medium term.

The longer-term picture may include healthier days for Ausdrill and SMS, and we of course reserve the right to revisit them down the road. But right now opportunity lies elsewhere.

We are therefore cutting our losses on both Ausdrill and SMS. Sell Ausdrill and SMS Management & Technology.

We have more on Ausdrill and SMS in this month’s Portfolio Update.