Saturday, December 03, 2016

Weekend Update - 12/3/16

Weekend Update

Good morning! Hope people got to see my Hoosiers beat the Tar Heels this week. Interesting fact, the last five times a top 3 team has visited Assembly Hall they have lost. Serious home court advantage.

As my followers know, I have been writing/blogging about Joel Greenblatt's Magic Formula Investing since 2006.  I have two series of portfolios (for a total of 8 tranches of five stocks) involving real money. I also have tracking portfolios that I update once a month to gauge how well an investor would have done being in MFI since 2006.

The past week was pretty blah, did give back a bit.  It was a tough week for MFI in general, down about 2.5%. My portfolio overall hung in decently as BAC warrants were up 5% and they are now far and away my largest holding.

MFI Select

Down 2.8% on the week... there usually seems to be a correlation here with my MFI Index.

2/1/2016  Start   Current   Dividend   Pct Gain   R3K Gain 
 VEC  $19.64 $23.08 $0.00 17.5% 16.7%
 QCOM  $45.18 $65.84 $2.07 50.3% 16.7%
 PERI  $2.45 $1.15 $0.00 -53.1% 16.7%
 DEPO  $15.34 $18.94 $0.00 23.5% 16.7%
 TDC  $24.02 $26.45 $0.00 10.1% 16.7%
 Totals  9.7% 16.7%
5/6/2016  Start   Current   Dividend   Pct Gain   R3K Gain 
 BRCD  $7.97 $12.36 $0.11 56.5% 9.4%
 CBI  $37.82 $32.10 $0.00 -15.1% 9.4%
 HSII  $18.51 $21.30 $0.26 16.5% 9.4%
 RHI  $38.51 $45.56 $0.66 20.0% 9.4%
 UTHR  $107.99 $126.49 $0.00 17.1% 9.4%
 Totals  19.0% 9.4%
8/15/2016  Start   Current   Dividend   Pct Gain   R3K Gain 
 CSCO  $31.20 $29.25 $0.26 -5.4% 1.6%
 GNC  $19.79 $13.32 $0.19 -31.7% 1.6%
 VLO  $54.73 $61.46 $0.60 13.4% 1.6%
 MSGN  $16.68 $20.70 $0.00 24.1% 1.6%
 GILD  $79.33 $72.42 $0.47 -8.1% 1.6%
 Totals  -1.6% 1.6%
11/15/2016  Start   Current   Dividend   Pct Gain   R3K Gain 
 MPAA  $26.55 $24.30 $0.00 -8.5% 1.4%
 ATHM  $22.61 $27.09 $0.00 19.8% 1.4%
 AMGN  $145.14 $144.01 $0.00 -0.8% 1.4%
 RHI  $43.23 $45.56 $0.22 5.9% 1.4%
 CA  $31.11 $31.05 $0.00 -0.2% 1.4%
 Totals  3.3% 1.4%
 Category/Tranche   August   November   February   May   Total 
 Initial Investment         25,000          25,000       25,000        25,000         100,000
 Current Tranche  -1.6% 3.3% 9.7% 19.0% 6.2%
 Previous Tranche  2.8% 8.0% -14.3% -25.2% 6.5%
 Tranche -2  11.2% 69.4% 8.5% 18.3% 26.8%
 Tranche -3  41.4% 14.2% 78.3% 33.0% 41.7%
 Tranche -4  14.1% 43.7% 0.0% 0.0% 14.5%
 MFI Overall Gain  81.6% 210.3% 81.7% 39.9% 103.4%
 Current Balance         45,394          77,573       45,434        34,983         203,383
 R3K Current Tranche  1.6% 1.4% 16.7% 9.4% 7.3%
 R3K Overall Gain  69.7% 72.8% 55.4% 33.0% 57.1%
 R3K Balance         41,779          43,193       38,856        33,238         157,065
 Annualized IRR  14.9% 32.2% 16.8% 9.8% 18.4%


So you can see my current May tranche is carrying most of the water here. Despite that, my four current tranches are up 6.2% versus 7.3% for Russell 3000.  Part of this is because May is now my smallest tranche (initial $25k per stock is just $34,983).


 Date   Differential   MFI Value   R3K Value 
12/1/2012 -2.20%          99,765            101,965
1/1/2013 -1.78%        102,798            104,575
2/1/2013 -2.26%        102,594            104,856
3/1/2013 -2.23%        102,881            105,114
4/1/2013 -0.43%        106,804            107,234
5/1/2013 2.00%        110,423            108,423
6/1/2013 4.75%        115,831            111,085
7/1/2013 4.29%        114,888            110,597
8/1/2013 6.91%        124,799            117,889
9/1/2013 10.46%        124,536            114,079
10/1/2013 19.67%        138,655            118,990
11/1/2013 19.75%        143,514            123,764
12/1/2013 23.70%        150,105            126,405
1/1/2014 26.63%        157,138            130,503
2/1/2014 24.70%        150,619            125,918
3/1/2014 25.66%        158,116            132,458
4/1/2014 30.38%        162,991            132,616
5/1/2014 29.65%        162,428            132,779
6/1/2014 31.44%        167,001            135,559
7/1/2014 39.23%        177,971            138,740
8/1/2014 31.13%        167,054            135,922
9/1/2014 35.90%        177,792            141,892
10/1/2014 29.38%        168,321            138,944
11/1/2014 26.14%        168,810            142,666
12/1/2014 30.22%        176,420            146,198
1/1/2015 28.17%        174,306            146,140
2/1/2015 20.63%        162,833            142,201
3/1/2015 25.15%        175,476            150,324
4/1/2015 29.95%        178,565            148,612
5/1/2015 37.31%        186,655            149,348
6/1/2015 51.53%        202,897            151,371
7/1/2015 62.69%        211,437            148,743
8/1/2015 40.75%        192,117            151,369
9/1/2015 36.41%        178,603            142,195
10/1/2015 43.12%        181,175            138,052
11/1/2015 69.02%        217,959            148,936
12/1/2015 73.49%        223,435            149,946
1/1/2016 63.33%        209,514            146,186
2/1/2016 49.49%        187,428            137,934
3/1/2016 56.48%        194,415            137,934
4/1/2016 47.34%        195,770            148,430
5/1/2016 46.38%        194,301            147,923
6/1/2016 51.44%        201,999            150,558
7/1/2016 50.41%        201,092            150,680
8/1/2016 52.72%        207,223            154,501
9/1/2016 67.04%        222,481            155,446
10/1/2016 42.98%        198,563            155,582
11/1/2016 41.86%        195,726            153,863
12/1/2016 45.92%        202,775            156,859
Current 46.32%        203,383            157,065

This is my month by month table, assuming I started with $100,000. 2016 continues to be a bit of a struggle, though going in right direction since 10/1.

Here is how stocks performed over past week:

 Portfolio   Stock   Last Week   Current   Dividend   Change 
 Select   RHI              45.26                   45.56                       -   0.7%
 Select   ATHM              28.05                   27.09                       -   -3.4%
 Select   CA              31.78                   31.05                       -   -2.3%
 Select   AMGN            145.43                144.01                       -   -1.0%
 Select   MPAA              26.35                   24.30                       -   -7.8%
 Select   QCOM              68.29                   65.84                  0.53 -2.8%
 Select   MSGN              19.90                   20.70                       -   4.0%
 Select   VLO              64.86                   61.46                       -   -5.2%
 Select   BRCD              12.38                   12.36                       -   -0.2%
 Select   DEPO              20.39                   18.94                       -   -7.1%
 Select   CSCO              30.09                   29.25                       -   -2.8%
 Select   VEC              23.10                   23.08                       -   -0.1%
 Select   TDC              27.35                   26.45                       -   -3.3%
 Select   GILD              75.44                   72.42                       -   -4.0%
Not many winners.

MFI Formula

While the 4 tranches I pick for MFI select are discretionary to me, MFI Formula (as it sounds) is formulaic.  It is comprised of stocks greater that $600m market cap and with a dividend of 2.4% or greater.  I then randomly pick five stocks that meet those criteria.


 12/31/15 Stocks   Start   Current   Dividend   Pct Gain   R3K Gain 
 BBY  $30.31 $45.67 $1.29 54.9% 9.6%
 GME  $28.34 $24.27 $1.11 -10.4% 9.6%
 ILG  $15.89 $18.08 $0.36 16.0% 9.6%
 PPC  $22.22 $17.69 $2.75 -8.0% 9.6%
 VIAB  $40.93 $36.52 $1.00 -8.3% 9.6%
 Totals  8.8% 9.6%
 4/1/16 Stocks  Start Current Dividend Pct Gain R3K Gain
 CALM  $51.27 $39.65 $0.44 -21.8% 9.3%
 HPQ  $12.10 $15.12 $0.25 27.0% 9.3%
 TIME  $15.24 $16.00 $0.57 8.7% 9.3%
 ILG  $13.85 $18.08 $0.24 32.2% 9.3%
 TSRA  $30.79 $39.30 $0.60 29.6% 9.3%
 Totals  15.1% 9.3%
7/1/2016  Start   Current   Dividend   Pct Gain   R3K Gain 
 ILG  $16.76 $18.08 $0.12 8.6% 5.0%
 VIAB  $44.00 $36.52 $0.20 -16.5% 5.0%
 CPLA  $53.22 $86.75 $0.78 64.5% 5.0%
 HRB  $23.62 $21.72 $0.22 -7.1% 5.0%
 PBI  $17.69 $14.63 $0.38 -15.2% 5.0%
 Totals  6.8% 5.0%
10/3/2016  Start   Current   Dividend   Pct Gain   R3K Gain 
 CPLA  $58.15 $86.75 $0.39 49.9% 2.2%
 LDOS  $43.01 $51.57 $0.00 19.9% 2.2%
 GME  $27.70 $24.27 $0.00 -12.4% 2.2%
 PBI  $18.15 $14.63 $0.19 -18.4% 2.2%
 CSCO  $31.72 $29.25 $0.26 -7.0% 2.2%
 Totals  6.4% 2.2%
 Category/Tranche   October   January   April   July   Total 
 Initial Investment      249,820        249,939     250,180      249,728         999,667
 Current Tranche  6.4% 8.8% 15.1% 6.8% 9.2%
 Previous Tranche  5.5% 11.0% -0.2% -12.5% 1.1%
 Tranche -2  0.5%                 -                 -                  -   0.1%
 MFI Overall Gain  12.8% 20.8% 14.9% -6.5% 10.5%
 Current Balance      281,749        302,006     287,372      233,548      1,104,676
 R3K Current Tranche  2.2% 9.6% 9.3% 5.0% 6.5%
 R3K Overall Gain  15.5% 9.3% 8.1% 4.8% 9.4%
 R3K Balance      288,424        273,167     270,420      261,617      1,093,628
 Annualized IRR  5.7% 10.3% 8.6% -4.6% 5.7%

I started this approach a couple years after the Select approach, so not as mature. You can see the current four tranches are up 9.2% versus 6.5% for R3K.  I am also winning overall, but not by as much as Select.


 Date   Differential   Value   R3K Value 
10/1/2014 0.00%        100,000            100,000
11/1/2014 1.63%        102,288            100,658
12/1/2014 0.30%        101,375            101,075
1/1/2015 -0.33%        100,664            100,995
2/1/2015 1.67%        101,281              99,611
3/1/2015 3.62%        106,073            102,454
4/1/2015 5.09%        106,781            101,695
5/1/2015 5.78%        107,859            102,077
6/1/2015 5.08%        108,213            103,134
7/1/2015 4.82%        106,423            101,604
8/1/2015 3.71%        107,112            103,404
9/1/2015 4.38%        101,523              97,139
10/1/2015 6.39%        100,703              94,312
11/1/2015 2.93%        104,835            101,907
12/1/2015 -3.48%          99,443            102,926
1/1/2016 -3.36%          96,830            100,012
2/1/2016 -0.72%          93,797              94,367
3/1/2016 4.07%          98,588              94,367
4/1/2016 0.34%        102,371            101,548
5/1/2016 -1.91%          99,774            101,200
6/1/2016 -0.42%        103,145            103,568
7/1/2016 -0.19%        103,022            103,216
8/1/2016 2.56%        109,419            106,857
9/1/2016 -0.34%        106,704            107,048
10/1/2016 -0.85%        106,377            107,230
11/1/2016 0.42%        105,421            105,003
12/1/2016 1.62%        110,705            109,088
Current 1.11%        110,468            109,362

Here is how stocks performed in past week:


 Stock   Last Week   Current   Dividend   Change 
 ILG              18.40                   18.08                  0.12 -1.1%
 CPLA              88.55                   86.75                       -   -2.0%
 GME              25.82                   24.27                       -   -6.0%
 VIAB              37.64                   36.52                       -   -3.0%
 BBY              46.58                   45.67                       -   -2.0%
 PBI              14.86                   14.63                       -   -1.5%
 TSRA              40.55                   39.30                       -   -3.1%
 HPQ              15.18                   15.12                       -   -0.4%
 LDOS              49.98                   51.57                       -   3.2%
 CSCO              30.09                   29.25                       -   -2.8%
 PPC              18.18                   17.69                       -   -2.7%
 TIME              13.60                   16.00                       -   17.6%
 HRB              23.98                   21.72                       -   -9.4%
 CALM              40.35                   39.65                       -   -1.7%

Obviously the bid for TIME was a key item here.

Dividend Portfolio

I am trying to build out an income stream here for retirement.  Obviously the spectre of higher rates puts a damper on this portfolio, but it hung in there last week (virtually flat).


 Dividend Stocks  Start  Current   Dividends   Overall Pct Gain   Weekly Pct Gain   7/1/16 Price   % Chg Since 7/1/16 
 CSQ      9.09       10.08              2.16 34.7% -0.8%           9.99 5.1%
 AOD      7.64         7.30              1.64 17.1% -2.9%           7.33 3.4%
 SBRA    22.46       22.37              0.42 1.5% 1.8%         22.46 -0.4%
 SJT      7.76         6.35              0.34 -13.8% 2.9%           7.26 -10.6%
 JQC      7.84         8.62              0.59 17.6% -0.1%           8.10 9.6%
 TGONF    10.24       11.30              1.85 28.5% 2.7%         10.05 14.1%
 PSXP    46.95       45.19              0.53 -2.6% 0.9%         46.95 -3.7%
 PSX    80.00       84.88              2.88 9.7% 0.0%         80.00 6.1%
 DSL    18.43       18.56              0.88 5.5% 1.2%         18.59 3.9%
 GLDI    10.66         9.17              0.68 -7.6% -0.4%         10.87 -10.3%
 O    24.07       54.73           19.16 207.0% -3.3%         69.64 -20.0%
 DHF      3.11         3.21                   -   3.2% -0.9%           3.11 3.2%
 OIBAX      5.07         5.58              2.30 55.4% -0.2%           5.84 -2.6%
 Totals  15.2% 1.6%