1. After gaining almost 11 percent in the first quarter, shares of Core Laboratories (NYSE: CLB) have returned 57 percent since we added the stock to the Growth Portfolio in December 2010. At these levels, the stock is priced for perfection and could pull back at the slightest disappointment; investors should sell at least one-half their position in Core Laboratories, turning paper profits into real wealth. Core Laboratories now rates a “Hold.”

Read more…

2. I’m adding the ProShares Short S&P 500 (NYSE: SH) to the Hedges Portfolio and my Best Buys List. This exchange-traded fund (ETF) tracks the inverse daily performance of the S&P 500; for example, if the S&P 500 drops 1 percent, then ProShares Short S&P 500 would rally roughly 1 percent.

ProShares Short S&P 500 and other ETFs that track the daily performance of a given index will produce returns that diverge from the benchmark’s overall return over a given period. For example, the S&P 500 rallied 12.6 percent in the first quarter of 2012, but ProShares Short S&P 500 declined by 11.5 percent. And in the third quarter of 2011, the S&P 500 fell about 13.8 percent, while ProShares Short S&P 500 gained 12.7 percent.

The tracking error for ProShares UltraShort S&P 500 (NYSE: SDS)–an ETF designed to track double the inverse of the S&P 500–is much greater. For example, in the third quarter of last year, the ProShares UltraShort S&P 500 returned 23.5 percent rather than the 27.6 percent one might have expected after the S&P 500 gave up 13.8 percent.

ProShares Short S&P 500 tracks the inverse performance of the S&P 500 relatively closely and is a convenient option for investors who’d rather not short individual stocks. I only intend to hold this hedge for a quarter or two at most to cushion the blow of a potential correction. ProShares Short S&P 500 ETF rates a buy under 37.50 in the Hedges Portfolio and my Best Buys List.

Read more…

3. GasLog’s (NYSE: GLOG) fleet currently consists of two LNG tankers that were delivered in 2010 and are under contract to Growth Portfolio holding BG Group (LSE: BG/, OTC: BRGYY) until 2015 and 2016, respectively. More important, shipbuilder Samsung Heavy Industries will deliver eight newly built LNG tankers to GasLog through 2015.

BG Group has already booked the four vessels slated to arrive in 2013 under time charters: Two of these carriers will operate under five-year contracts, while the other pair have fixture terms of six years. Royal Dutch Shell (LSE: RDSA, NYSE: RDS A, RDS B) has locked up two vessels scheduled for delivery in late 2013 and early 2014 under seven-year deals; the final two LNG tankers under construction that will arrive in late 2014 and early 2015 are still available and will likely secure attractive bookings. GasLog also has the option to purchase two additional LNG carriers from Samsung Heavy Industries–if day-rates hold up, expect the company to exercise this option.

In addition to its wholly owned fleet, GasLog manages the 11 ships controlled by BG Group and owns a 25 percent stake in one additional LNG carrier leased under a 20-year time charter. The company’s management activities include supervising the construction of new LNG tankers, maintaining the existing fleet and staffing each vessel with well-trained personnel.

After serving as the sole technical manager for BG Group’s extensive carrier fleet for more than a decade, GasLog boasts one of the most experienced management teams in the business.

The locked-in earnings growth from the firm’s order book is impressive. Management estimates that these charters in 2012 will generate almost $56 million in revenue. As new vessels enter the fleet in 2013 and 2014, this revenue stream will surge to about $133 million in 2013 and $214 million in 2014.

GasLog will return some of this capital to shareholders in the form of a regular quarterly dividend–initially $0.11 per share for the fourth quarter of 2012. (In other words, investors who buy the stock shortly won’t receive a dividend for almost 12 months.) At the stock’s current price, that payout would amount to a dividend yield of almost 4 percent. Buy GasLog under 13 in the Aggressive Portfolio.

Read more…