Thursday, December 13, 2018

12/31/17 MFI Formula Tranche Winding Down

12/31/17 MFI Formula Tranche Winding Down

Mid December is hear.  And that means it is time to start thinking about ending a tranche and starting a new tranche.  My regular readers know that my 4 tranches that start/end at beginning of a quarter are formula-driven.  So I do not pick the five new stocks, rather I pick a subset of official list via filters and random number generator.

First, the 7 stocks I didn't pick a year ago, due to Mr Randomizer were:  VIAB, PBI, IPG, HPQ, DIN, CJREF and CSCO.  In aggregate they are up about 6%.  The Russell 3000 is basically flat YTD right now, so that is a win.  Here are the five stocks Mr Random dealt to me:

1/2/2018  Start   Current   Dividend   Pct Gain   R3K Gain 
 AMGN  $177.11 $196.41 $5.28 13.9% -0.4%
 GME  $18.06 $13.23 $1.52 -18.3% -0.4%
 GILD  $71.64 $68.14 $1.71 -2.5% -0.4%
 HRB  $26.34 $28.04 $0.99 10.2% -0.4%
 OMC  $72.81 $77.59 $1.80 9.0% -0.4%
 Totals  2.5% -0.4%


So not exactly knocking your socks off... but that is better than the benchmark and my overall portfolio by a bunch.  I do believe this approach works.

This Approach

So it is reasonable to ask what "this approach" is.  Here is what I do:

1.  Take the top 50 stocks greater than 130m from official list:

Ticker Market Cap Price Dividend Yield
ACOR                       772         16.37                     -   0.00%
AEIS                   1,630         42.11                     -   0.00%
ALSN                   5,574         43.00                0.60 1.40%
AMCX                   3,329         58.91                     -   0.00%
AMAT                 33,003         34.20                0.70 2.05%
AGX                       641         41.19                0.75 1.82%
AKG                       158           0.70                     -   0.00%
HRB                   5,763         28.04                0.68 2.41%
BPT                       577         26.97                5.29 19.62%
CELG                 49,552         70.90                     -   0.00%
CJREF                       783           3.69                0.24 6.50%
DLX                   1,980         42.75                1.20 2.81%
DXC                 16,356         58.15                0.75 1.29%
ESIO                   1,030         29.69                     -   0.00%
FTSI                       844           7.72                     -   0.00%
GME                   1,352         13.23                1.52 11.49%
GILD                 88,309         68.14                2.23 3.27%
EAF                   3,565         12.27                0.23 1.91%
HSII                       645         34.04                0.52 1.53%
HPQ                 35,088         22.55                0.58 2.56%
IMMR                       263           8.53                     -   0.00%
INVA                   1,994         17.58                     -   0.00%
IDCC                   2,540         73.30                1.40 1.91%
KLAC                 14,319         93.54                2.84 3.04%
LRCX                 22,214      138.45                3.79 2.74%
LGORF                   1,198           2.29                     -   0.00%
LTRPA                   1,425         18.98                     -   0.00%
TUSK                       969         21.66                0.25 1.15%
MCFT                       400         21.34                     -   0.00%
MSB                       348         26.49                2.79 10.53%
MKSI                   3,675         68.08                0.78 1.15%
MSGN                   1,847         24.68                     -   0.00%
NHTC                       262         23.07                0.58 2.51%
NKTR                   6,398         36.97                     -   0.00%
EGOV                       824         12.56                0.32 2.55%
OMC                 17,442         77.59                2.40 3.09%
PETS                       476      690.00              31.19 4.52%
STX                 11,445         40.00                2.52 6.30%
SIGA                       512           6.38                     -   0.00%
SGH                       696         31.23                     -   0.00%
SP                       648         28.91                     -   0.00%
STRL                       302         11.14                     -   0.00%
TVTY                   1,124         28.07                     -   0.00%
TUP                   1,738         35.77                2.72 7.60%
HEAR                       246         17.31                     -   0.00%
UIS                       633         12.41                     -   0.00%
UTHR                   5,269      112.01                     -   0.00%
VEC                       251         22.31                     -   0.00%
VIAB                 11,900         29.52                0.80 2.71%
WDC                 11,840         40.97                2.00 4.88%

I then filter the list to take the largest 34 companies by market cap and those with a yield 2.4% or greater.  That leaves me with:


Ticker Market Cap Price Dividend Yield
HRB                 5,763         28.04              0.68 2.41%
CJREF                    783           3.69              0.74 20.01%
DLX                 1,980         42.75              1.20 2.81%
GME                 1,352         13.23              1.52 11.49%
GILD              88,309         68.14              2.23 3.27%
HPQ              35,088         22.55              0.58 2.56%
KLAC              14,319         93.54              2.84 3.04%
LRCX              22,214      138.45              3.79 2.74%
EGOV                    824         12.56              0.32 2.55%
OMC              17,442         77.59              2.40 3.09%
STX              11,445         40.00              2.52 6.30%
TUP                 1,738         35.77              2.72 7.60%
VIAB              11,900         29.52              0.80 2.71%
WDC              11,840         40.97              2.00 4.88%

I the would allow myself to throw out one stock.  Not sure what I would do here, perhaps GME.  I then run a random number generator to pick 5 stocks from this list. (an aside, I would also double check some of the figures - CJREF is showing a trailing dividend yield, they have cut the dividend and are closer to 6.4%... but they would still qualify).

Stay tuned, always not exciting!