Monday, May 23, 2016

REXI To Be Acquired!

i just saw where REXI has agreed to be acquired for $9.48 a share.  That is a 50% premium to where they are today. As REXI is my 7th largest holding, this will really jump start 2016 for me. I was up 2.3% for the year going into today. This will move me closer to 4%.

I will likely sell as most of my gains will be subject to short term CG taxes. Most of my big buys were December and January. I think I have some short term capital losses. Just checked, I do have ST capital losses as I sell my MFI losers to harvest those losses.

That will give me an outsized cash position.  I may add to my BIZD, but nothing else in mind for now.

It is nice to benefit from one of these M&A deals. I missed the TPUB as I sold 3/1.

Saturday, May 21, 2016

Weekend Update 5/21/16

Weekend Update

I was surprised this morning when I did the math and saw I was up 1.2% on the week.  It didn't seem like a good week. But CSCO had strong earnings, BAC-WTA went up at the sniff of interest rate hikes and my pharma stocks DEPO and LCI had some major lift.

So I am now up 2.3% for 2016 (please pause while I crow like a rooster) which is better than the anemic R3K (up a mere 1%).  Of course, to be frank it isn't MFI doing the lifting for me in 2016, my select approach is down 6.5% and my formula approach is down 0.7%.  It is more my swing trades (which have been surprisingly effective) and my dividend/warrant holdings.

MFI Results By Year

I have not published this table in a while, but it shows my MFI Index year by year and inception to date against the benchmark.  It is in line with the "One Depressing Graph" posting of last week.

 Annual   Inception to Date 
 Year   Russell   MFI   Russell ITD   MFI ITD 
2006 11.40% 15.03% 11.40% 15.03%
2007 4.09% -6.69% 15.96% 7.34%
2008 -37.05% -37.97% -27.00% -33.42%
2009 32.51% 45.18% -3.27% -3.34%
2010 18.38% 22.77% 14.50% 18.67%
2011 -0.56% -10.47% 13.87% 6.25%
2012 16.43% 9.70% 32.57% 16.56%
2013 33.01% 51.70% 76.34% 76.82%
2014 12.26% 12.07% 97.95% 98.15%
2015 0.38% -8.95% 98.33% 89.37%
2016 0.97% -5.27% 99.29% 84.66%


So you can see MFI was trailing going into 2013. It had a big year and caught up. 2014 was a push and now 2015 and 2016 it has trailed.  Who knows, next year might be another big win.

MFI Select

 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
Current 47.87%        195,535            147,665


It is funny, think about the table I displayed showing my MFI index and then look at my MFI select. 2013 was a huge year for me as well as I went from 102,798 to 157,138 - that corresponds pretty closely to the 51.7% gain for the index. And in 2016 I have gone down from 209,514 to 195.535 - that again corresponds to the -5.27% for the index in 2016.  My point being that it is possible for me to "select" stocks and differentiate from the index, but the two will generally move in the same direction.

8/17/2015  Start   Current   Dividend   Pct Gain   R3K Gain 
 VDSI  $18.66 $15.95 $0.00 -14.5% -1.5%
 SALE  $9.34 $7.10 $0.00 -24.0% -1.5%
 CSCO  $28.95 $27.97 $0.68 -1.0% -1.5%
 TGNA  $25.30 $22.57 $0.42 -9.1% -1.5%
 HSII  $20.14 $18.27 $0.26 -8.0% -1.5%
 Totals  -11.3% -1.5%
11/15/2015  Start   Current   Dividend   Pct Gain   R3K Gain 
 LCI  $34.01 $22.50  $           -   -33.8% 0.7%
 SAVE  $34.48 $42.32  $           -   22.8% 0.7%
 PPC  $18.98 $24.97  $       2.75 46.0% 0.7%
 VEC  $23.60 $24.52  $           -   3.9% 0.7%
 VNCE  $3.99 $5.86  $           -   46.9% 0.7%
 Totals  17.1% 0.7%
2/1/2016  Start   Current   Dividend   Pct Gain   R3K Gain 
 VEC  $19.64 $24.52  $           -   24.9% 7.1%
 QCOM  $45.18 $54.52  $       0.48 21.7% 7.1%
 PERI  $2.45 $1.30  $           -   -46.9% 7.1%
 DEPO  $15.34 $19.92  $           -   29.9% 7.1%
 TDC  $24.02 $26.44  $           -   10.1% 7.1%
 Totals  7.9% 7.1%
5/6/2016  Start   Current   Dividend   Pct Gain   R3K Gain 
 BRCD  $7.97 $7.97  $           -   0.0% 0.4%
 CBI  $37.82 $36.59  $           -   -3.3% 0.4%
 HSII  $18.51 $18.27  $           -   -1.3% 0.4%
 RHI  $38.51 $39.69  $           -   3.1% 0.4%
 UTHR  $107.99 $113.62  $           -   5.2% 0.4%
 Totals  0.7% 0.4%
 Category/Tranche   August   November   February   May   Total 
 Initial Investment         25,000          25,000       25,000        25,000      100,000
 Current Tranche  -11.3% 17.1% 7.9% 0.7% 3.7%
 Previous Tranche  11.2% 69.4% -14.3% -25.2% 56.3%
 Tranche -2  41.4% 14.2% 8.5% 18.3% 20.6%
 Tranche -3  14.1% 43.7% 78.3% 33.0% 0.0%
 MFI Overall Gain  59.0% 225.8% 78.8% 18.5% 95.5%
 Current Balance         39,754          81,457       44,707        29,618      195,535
 R3K Current Tranche  -1.5% 0.7% 7.1% 0.4% 1.7%
 R3K Overall Gain  56.2% 58.8% 42.7% 33.0% 47.7%
 R3K Balance         39,053          39,706       35,669        33,238      147,665
 Annualized IRR  13.1% 39.9% 19.2% 5.7% 21.2%

Looking at the tranches, August has really fallen off the table.  All five stocks are down. HSII has really crashed, it is down 8% but was up over 35% at the start of 2016. The November tranche continues to be very strong.  February is frustrating (pause a moment while I kick myself), I actually have 4 strong stocks, but PERI is killing me! It may still bounce back, but their last earnings report was a mess.

Then May is off to an ok start.  BRCD had pretty subpar earnings on Friday, but the stock price has held in there.

MFI Formula

As  this approach continues to underwhelm, I keep toying with the idea of pulling the plug or modifying (perhaps just two tranches a year instead of 4).

7/1/2015  Start   Current   Dividend   Pct Gain   R3K Gain 
 BKE  $46.45 $23.27 $1.96 -45.7% -1.0%
 CA  $29.34 $31.31 $0.75 9.3% -1.0%
 MSFT  $44.42 $50.62 $1.39 17.1% -1.0%
 QCOM  $62.95 $54.52 $1.44 -11.1% -1.0%
 VIAB  $64.75 $39.05 $1.20 -37.8% -1.0%
 Totals  -13.7% -1.0%
10/1/2015  Start   Current   Dividend   Pct Gain   R3K Gain 
 BKE  $36.83 $23.27 $1.73 -32.1% 6.3%
 IQNT  $21.96 $16.23 $0.30 -24.7% 6.3%
 QCOM  $53.45 $54.52 $0.96 3.8% 6.3%
 CSCO  $26.37 $27.97 $0.68 8.6% 6.3%
 CA  $27.30 $31.31 $0.50 16.5% 6.3%
 Totals  -5.6% 6.3%
 12/31/15 Stocks   Start   Current   Dividend   Pct Gain   R3K Gain 
 BBY  $30.31 $32.34 $0.73 9.1% 0.6%
 GME  $28.34 $28.48 $0.37 1.8% 0.6%
 IILG  $15.89 $13.16 $0.12 -16.4% 0.6%
 PPC  $22.22 $24.97 $2.75 24.8% 0.6%
 VIAB  $40.93 $39.05 $0.40 -3.6% 0.6%
 Totals  3.1% 0.6%
 4/1/16 Stocks  Start Current Dividend Pct Gain R3K Gain
 CALM  $51.27 $45.45 $0.44 -10.5% 0.3%
 HPQ  $12.10 $11.66 $0.00 -3.7% 0.3%
 TIME  $15.24 $14.49 $0.00 -4.9% 0.3%
 IILG  $13.85 $13.16 $0.00 -5.0% 0.3%
 TSRA  $30.79 $30.52 $0.00 -0.9% 0.3%
 Totals  -5.0% 0.3%

You can quickly see that 3 of 4 tranches are trailing.

 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
Current -3.42%          97,586            101,011

Pretty difficult to get excited about this table. My annualized IRR since starting this is -1.9%. It has been tough sledding since a year ago, down almost 10%.  Not exactly getting rich.

Dividend and Warrants

This continues to be my gold standard, up almost 7% this year.

 Div and Warrants   Start   Current   Dividend   Pct Gain   Pct Gain Last Week   Year End 2015 
 BAC-WTA  $4.90 $4.00 $0.00 -18.3% -22.8% -3.6%
 AOD  $7.65 $7.35 $1.38 14.2% 13.9% 15.3%
 JQC  $7.81 $7.97 $0.30 5.9% 5.4% 0.9%
 CSQ  $9.04 $9.64 $1.77 26.2% 27.1% 27.3%
 NTC  $12.07 $13.55 $1.50 24.7% 25.7% 16.1%
 TGONF  $10.24 $10.05 $1.52 13.0% 10.6% 8.3%
 HIG-WT  $21.24 $37.98 $0.00 78.8% 76.1% 72.9%
 O  $23.31 $59.19 $18.32 232.5% 253.5% 205.7%
 OIBAX  $5.05 $5.70 $2.21 56.6% 57.3% 51.9%
 SJT  $8.75 $6.28 $0.19 -26.1% -28.1% -51.6%
 REXI  $5.60 $6.46 $0.13 17.6% 11.2% -2.8%
 Totals  9.5% 7.8% 6.2%

You can see that it was a good week, going from +7.8% to +9.5%.  I am kicking around unwinding the SJT position this summer.  I have convinced myself that AR is a better play on natural gas and I have seen several of these trust approaches crash (BPT, MSB and GNI to name three). TRusts at some point run down as they are generally not reinvesting in the future.  Not sure you want to be holding the bag at the end. I need to do more research.

Discretionary Stocks

With the winding down of my Micro MFI approach, I now have a basket of stocks that are discretionary:

I will roll BIZD into the dividend bucket in 2017.  Not sure how I will track the other five - I may just mention occasionally as the idea of the discretionary stocks is that they will be changing.