Where Art Thou?

Ah yes, classic Romeo and Juliet. While I am still a fan of MFI (despite having not exactly excelled thus far), one thing that I do not understand is the disappearance of stocks from the MFI website. My understanding is that the website uses Compustat data, which is the same as Fidelity. So my thesis is that if I can calculate the two factors through Fidelity, then the MFI website should be able to do it. Let us look at two examples.

WSTG - this is a software/programming company that I used to own. They have become very small cap, with a market cap of $35m. I showed they disappeared after the end of April, even though at the time their March 31st financials gave them stellar ratios of 21% and >100%. They had an excellent June and by my calc now have ratios of 26% and >100%. So why aren't they on the list?

Looking at their financials (which I show below) I note that there are two items with "n/a". That being operating income befofre depreciation and stock compensation expense. Perhaps that throws them out?

	Q2 2008
	6/30/2008
Total Revenue	48.096
Cost of Goods Sold	43.798
Selling, General and Administrative Expenses	3.074
Operating Income Before Depreciation	N/A
Depreciation & Amortization	--
Operating Income After Depreciation	1.224
Interest and Related Expense	0
Nonoperating Income (Expense)	0.146
Special Items	0
Pretax Income	1.37
Income Taxes	0.547
Minority Interest - Income Account	0
Income Before Extraordinary Items	0.823
Dividends - Preferred/Preference	0
Income Before Extraordinary Items - Available for Common	0.823
Common Stock Equivalents - Dollar Savings	0
Income Before Extraordinary Items - Adjusted for Common Stock Equivalents	0.823
Extraordinary Items and Discontinued Operations	0
Extraordinary Items	0
Discontinued Operations	0
Net Income (Loss)	0.823
Earnings per Share	--
EPS - Basic - Excluding Extraordinary Items	0.19
EPS - Basic - Including Extraordinary Items	0.19
EPS - Basic - Excluding Extraordinary Items - TTM	0.73
EPS - Diluted - Excluding Extraordinary Items	0.18
EPS - Diluted - Including Extraordinary Items	0.18
Diluted - Excluding Extraordinary Items TTM	0.7
EPS from Operations - Basic	0.19
EPS from Operations - Basic TTM	0.73
EPS from Operations - Diluted	0.18
From Operations - Diluted TTM	0.7
Common Share Used to Calculate:	--
EPS Basic	4,417.00
EPS Diluted	4.505
Supplemental
	Q2 2008
	6/30/2008
Foreign Exchange Adjustment	0.004
Stock Compensation Expense	N/A

Now let us look at candidate 2, a current holding of mine: KSW. This is a contracting firm that installs heating and air conditioning in NYC. They have a rock solid balance sheet and very steady earnings.

They fell off the charts about March 22nd, likely just after Dec 31st quarter came on line. At that time they had a stunning EY of 30% and a ROC exceeding 100%. Hmm, looking at their financials, it seems pretty clear why they are not currently on the list. Most detailed items for this quarter are "n/a". However, we know they had a good quarter. We also know that based on the quarter ending March 31st that they'd have an EY of 46% and ROC well in excess of 100%.

What is the lesson? There are likely numerous excellent companies that are NOT on the lists because of minor quirks in their data, that a computer might toss out, but a human reading the press release and the financials could still work through. Are these worthwhile stocks to own? That might depend on whether you think there is an "MFI premium", meaning so many people follow MFI that stocks pop when they appear on the list. This approach would allow people to "front run" the list. Of course, I am utterly unconvinced that such a premium currently exists, but would be curious what others think.

KSW Quarterly Financial Statements
Quarterly Balance Sheet
Print
Currency in Millions of U.S. Dollars. Shares in Thousands.
Assets
	Q2 2008	Q1 2008
	6/30/2008	3/31/2008
Current Assets
Cash and Short-Term Investments	N/A	17.749
Receivables	N/A	24.661
Inventories	N/A	0.658
Other Current Assests	N/A	0.417
Current Assets - Total	N/A	43.485
Long-Term Assets
Property Plant and Equipment - Net	N/A	0.259
Other Assets Total	N/A	0.194
Goodwill	N/A	0
Assets - Total	N/A	43.938
Liabilities and Shareholders' Equity
	Q2 2008	Q1 2008
	6/30/2008	3/31/2008
Current Liabilities
Debt in Current Liabilities	N/A	0
Accounts Payable	N/A	20.707
Income Taxes Payable	N/A	0
Current Liabilities - Other	N/A	4.946
Current Liabilities - Total	N/A	25.653
Long-Term Liabilities
Long-Term Debt	N/A	0
Deferred Taxes and Investment Tax Credit	N/A	0
Liabilities - Other	N/A	0
Liabilities - Total	N/A	25.653
Minority Interest - Balance Sheet	N/A	0
Shareholders' Equity
Preferred Capital	N/A	0
Common Equity - Total	N/A	18.285
Common Capital	N/A	0.063
Capital Surplus/Share Premium Reserve	N/A	13.259
Retained Earnings	N/A	4.963
Treasury Stock	N/A	0
Shareholders' Equity - Total	N/A	18.285
Liabilities and Shareholders' Equity - Total	N/A	43.938
Common Shares Outstanding	6,281.00	6,281.00
Supplemental
	Q2 2008	Q1 2008
	6/30/2008	3/31/2008
Invested Capital - Total	N/A	18.285
Working Capital (Balance Sheet)	N/A	17.832
Financial Services Companies	--	--
Real Estate Investment Trust Companies	--	--