Monday, November 20, 2017

KNOP Bid/Ask Per Yahoo

Pretty funny. I posted a link to a positive article about KNOP this weekend.  Then I wake up this morning and per Yahoo Finance the bid is above the ask.  Weird.

GME is also bouncing pre market, up 2.5%.



Previous Close20.25
Open20.30
Bid22.00 x 500
Ask20.50 x 100
Day's Range19.95 - 20.35
52 Week Range19.85 - 24.67
Volume160,111
Avg. Volume88,648
Market Cap673.37M
Beta0.53
PE Ratio (TTM)9.21
EPS (TTM)2.20
Earnings DateFeb 12, 2018 - Feb 16, 2018
Forward Dividend & Yield2.08 (8.98%)
Ex-Dividend Date2017-07-31

Sunday, November 19, 2017

Is GME A Bargain?

Is GME A Bargain?

As my readers know, I have two real money MFI portfolios.  One I call "Select", in that I pick the stocks with really no constraints.  The other portfolio is picked by formula and random number generator.  The purpose of the formula and random number generator is that we all bring our biases to investing.

If a stock has done well for you in the past, most people are more likely to buy it in the future. Conversely, if you have been burned by a stock, you may be less likely to buy it again.   Ironically, that may be the exact opposite of what you should do.  So I try to take that out.

GME is a great example of a much hated stock.  I personally have struggled with it.  Here is a table summarizing my GME experience:


Date Purchased Date Sold Stock Purchase Price Current/Sold Price Open/Closed Pct Gain
09/30/14 09/30/15 GME $41.70 $40.82 Closed 1.3%
12/31/14 12/30/15 GME $34.21 $28.71 Closed -11.9%
03/31/15 03/31/16 GME $37.69 $32.12 Closed -10.9%
12/31/15 12/30/16 GME $28.34 $25.45 Closed -5.0%
10/03/16 10/04/17 GME $27.70 $20.14 Closed -21.8%
07/10/17 GME $20.95 $16.31 Open -20.3%
10/02/17 GME $20.50 $16.31 Open -20.4%


So I have bought it 7 times (all in my MFI Formula).  My average "gain" thus far is -12.7%.  Pretty discouraging.  I do allow myself to throw out one stock when I use the Formula and I was so so tempted to toss GME in October (so far that may have been the right instinct).

But even though they are hated and the stock price is declining does not mean the stock is a bad value at $16.31.  I would suggest that it may actually be a screaming buy.  It pays a 9.4% dividend.  Now there probably is a non zero chance that that dividend gets cut at some point, but analysts have GME making about $3,30 a share in 2018 and 2019.  Yes not as good as $3.77 in fiscal year 2017, but still seems very good for a company selling at $16.31.

I thought the same thing back in August when BKE dipped under $14 (it is now over $20) - a company can get beaten down too far.  I may buy some shares ahead of earnings on Tuesday.  Here is a seeking alpha article:


Best Performing Segment Of MFI Recently

Best Performing Segment Of MFI Recently

As my readers know, I keep a detailed database of how stocks from the official magic formula investing website have fared over time - assuming you buy the top 50 stocks > $100m and hold them for a year.

One can (and I have) take subsets of those lists and see what subset have been most successful (or at times least successful).  While they say history doesn't repeat itself, it at least rhymes.

I have found that the best indicator of out-performance for MFI stocks is whether the stocks pays a dividend.  And I have used 2.6% yield and above as my cutoff point.  To be clear, that can be either a regular quarterly dividend or a special dividend.

Over time, I have also seen that market cap is a decent predictor of out performance.  So it just made sense to me that if I combined these two factors: (1) dividend payers and (2) larger market caps and filtered official list that results would be good.  And historically, that is true. And thus was born my MFI Formula Portfolio.

The "problem" though is that in 2016 that pattern did not hold.  Dividend stocks from official list still did well.  But instead of larger market caps outperforming, it was smaller market cap stocks.

So for stocks on the list at end in each month of 2016 that had (1) a dividend yield of at least 2.6% AND (2) a market cap under $600m, their average gain so far has been 29%!  That is right, an eye-popping 29%.  The average MFI stocks bought in 2016 is up 16% and the Russell 3000 average (assuming bought 12 times, once at end of each month) is up 18.5% in 2016.

So very nicely done.  I think it was a good year for smaller cap stocks as the perfume of tax reform has a bigger impact on small caps as they are more likely to have majority of income from USA.  Here is the list of stocks:


Date Stock  Initial Price   End Price  Percent Change  Mkt Cap  Yield
10/28/2016 MCFT              11.20           22.97 105%            208 38.4%
3/24/2016 BBSI              27.21           54.62 101%            199 3.3%
1/29/2016 CPLA              42.78           85.40 100%            526 3.6%
4/22/2016 MSB                8.14           15.30 88%            117 3.6%
3/24/2016 CLCT              14.57           26.10 79%            139 9.6%
9/30/2016 MCFT              11.40           20.38 79%            212 37.7%
6/30/2016 MCFT              11.05           19.55 77%            207 38.9%
2/26/2016 OUTR              30.49           52.00 71%            524 3.9%
2/26/2016 CPLA              44.55           75.80 70%            541 3.5%
5/27/2016 BPT              12.06           20.20 68%            300 20.3%
11/25/2016 MCFT              13.50           22.07 63%            252 31.9%
6/30/2016 BPT              13.41           21.60 61%            389 21.2%
7/29/2016 MCFT              11.48           18.44 61%            213 37.5%
1/29/2016 OUTR              32.66           52.00 59%            583 3.7%
3/24/2016 MED              28.39           44.37 56%            351 3.5%
3/24/2016 IQNT              14.93           22.90 53%            517 4.3%
12/30/2016 MCFT              14.58           22.07 51%            272 29.5%
8/26/2016 MCFT              11.99           17.66 47%            222 35.9%
1/29/2016 CLCT              14.39           20.90 45%            135 9.7%
7/29/2016 BPT              14.14           20.50 45%            352 14.6%
10/28/2016 HSII              17.10           24.75 45%            326 3.0%
4/22/2016 IQNT              15.87           22.90 44%            549 3.8%
9/30/2016 IQNT              16.14           22.90 42%            552 4.0%
9/30/2016 BPT              16.02           22.45 40%            399 12.9%
5/27/2016 IQNT              16.48           22.90 39%            567 3.9%
3/24/2016 BPT              14.60           20.10 38%            349 27.3%
1/29/2016 IQNT              16.69           22.90 37%            580 3.6%
1/29/2016 BPT              23.98           32.80 37%            573 10.0%
6/30/2016 HSII              16.02           21.75 36%            316 3.2%
2/26/2016 IQNT              16.88           22.90 36%            584 3.6%
4/22/2016 BPT              14.38           19.45 35%            358 19.8%
2/26/2016 PETS              16.04           21.33 33%            339 4.5%
4/22/2016 PETS              17.45           23.10 32%            369 4.1%
8/26/2016 BPT              15.00           19.50 30%            374 13.7%
2/26/2016 RECN              13.76           17.00 24%            525 2.9%
10/28/2016 WILN                1.43             1.76 23%            174 2.8%
1/29/2016 PETS              17.31           21.00 21%            366 4.2%
5/27/2016 HSII              18.38           22.25 21%            350 2.8%
3/24/2016 PETS              16.77           20.14 20%            354 4.5%
3/24/2016 SPOK              16.08           19.00 18%            350 3.1%
9/30/2016 HSII              18.07           21.15 17%            345 2.9%
4/22/2016 SPOK              15.99           17.95 12%            348 3.1%
11/25/2016 BPT              18.36           19.85 8%            457 14.8%
10/28/2016 SPOK              16.61           17.90 8%            355 3.0%
5/27/2016 SPOK              16.40           17.25 5%            352 2.9%
8/26/2016 SPOK              15.97           16.70 5%            342 3.1%
10/28/2016 BPT              18.92           18.95 0%            471 14.4%
11/25/2016 SPOK              17.51           17.10 -2%            375 2.9%
7/29/2016 HSII              18.96           18.45 -3%            362 2.7%
12/30/2016 BPT              20.43           19.85 -3%            508 13.3%
8/26/2016 HSII              18.77           18.20 -3%            358 2.8%
9/30/2016 RECN              14.48           13.90 -4%            541 3.0%
2/26/2016 BPT              22.66           21.30 -6%            541 10.6%
7/29/2016 SPOK              17.74           16.35 -8%            381 2.8%
9/30/2016 SPOK              17.11           15.35 -10%            366 2.9%
9/30/2016 WILN                1.51             1.32 -13%            183 2.6%
8/26/2016 RECN              14.61           12.30 -16%            546 3.0%
6/30/2016 PDLI                3.14             2.47 -21%            529 6.4%
3/24/2016 PDLI                3.07             2.27 -26%            511 6.5%
1/29/2016 PDLI                3.05             2.25 -26%            514 19.7%
5/27/2016 PDLI                3.29             2.39 -27%            549 6.0%
7/29/2016 PDLI                3.52             2.32 -34%            578 5.7%
5/27/2016 PMTS                3.94             1.90 -52%            232 4.4%


This outperformance has carried into 2017.  This group of stocks is up an average of 13%.  The overall MFI grouping is actually slightly negative, so much much better in this subset and the Russell 3000 is up 7.2%.