“Mr. Irrelevant” Companies

By Dan Crimmins on April 25, 2018 in Investing

The 2018 National Football League (NFL) Draft will be held this weekend from April 26th to 28th. The NFL draft is where NFL franchises select newly eligible players. Each team selects in reverse order of how their team performed the year before with the worst team selecting first. There are 32 teams in the league and there are 7 rounds to the draft. Thus, 224 men will be selected in this year’s draft. The number of teams drafting has changed over time, and there have been as many as 30 rounds in a single draft.

Recently, the last man selected in the NFL draft has been given the label – “Mr. Irrelevant”. Although the NFL Draft dates back to 1936, the first person to officially be given the “Mr. Irrelevant” title was Kelin Kirk, pick number 487 of the 1976 draft when the draft had more rounds. The current Mr. Irrelevant is Chad Kelly, former quarterback for the Ole Miss Rebels football team, who was picked 253rd by the Denver Broncos in the 2017 draft.

After learning of this, I thought that the well diversified institutional mutual funds could use such an award. You see – several of the Dimensional institutional mutual funds that we invest our clients’ money have thousands of companies in each of their funds.

Photo by zennie62

With this many companies in the fund, it provides the needed broad diversification to “spread” the risk of investing to entire markets such as emerging markets, or the entire US market. However, it makes several of the companies seem “irrelevant”. We figured that we would highlight some of the smaller companies in one of their funds to overcome this label.

As of March 31, 2018, the DFA U.S. Core Equity fund (DFEOX) had 2,661 holdings with investments worth approximately $22 Billion. Here are 3 companies that make-up our title of “Company Irrelevant”. You will see they are not so Irreverent after all.

The following company was the 2,315-ranked holding with approximately $92 million value in the fund: Hamilton Beach Brands trades on the New York Stock Exchange under the ticker symbol – HBB.

On September 29, 2017, Hamilton Beach Brands Holding Company was spun off from its former parent company to become an independent public company. Hamilton Beach Brands, Inc. is a leading designer, marketer and distributor of branded, small electric household and specialty housewares appliances, as well as commercial products for restaurants, bars and hotels. The Kitchen Collection, LLC is a national specialty retailer of kitchenware in outlet and traditional malls throughout the United States.

The following company was the 2,246 ranked holding with approximately $128 million value in the fund: Adams Resources & Energy Inc. trades on the NYSE under the ticker symbol -AE.

Adams Resources and Energy, Inc. is engaged in the production and marketing of crude oil, natural gas and liquid chemical products. Adam was founded by K. S. “Bud” Adams Jr. in 1947 and went public in 1974. The Company and its subsidiaries presently have over 800 employees. The company is primarily engaged in the business of crude oil marketing and tank truck transportation of liquid chemicals and dry bulk.

The following company was the 2,090-ranked holding with approximately $284 million value in the fund: Rosetta Stone trades on the NYSE under the ticker symbol – RST.

Founded in 1992, Rosetta Stone is a leading provider of technology-based language learning solutions. The company currently offers self-study language learning solutions in 31 languages. Its customers include individuals, educational institutions, armed forces, government agencies and corporations.

As you can see from only highlighting 3 of the smaller companies owned in one U.S. focused fund which owns over 2,600 companies, these publicly traded companies are not irrelevant in any sense of the word. We believe owning all publicly traded companies provides investors the best chance of having a successful investing experience.

Now, let’s hope the NY Jets are able to select their franchise quarterback with the 3^rd pick in this year’s draft. Go J-E-T-S

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The foregoing content reflects the opinions of Crimmins Wealth Management and is subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that the statements, opinions or forecasts provided herein will prove to be correct. Past performance may not be indicative of future results. All investing involves risk, including the potential for loss of principal. There is no guarantee that any investment plan or strategy will be successful.