Had earnings in two of my stocks today, ENDP and AIRV. They were both good. In fact, I have had good earnings pretty much across the board for my stocks thus far, which is very different from the past two years, where every earnings season was nail-biting time and I commonly saw MFI stocks trounced 10 to 15%. FRX, PFE, and ICO are my other companies that have announced and I can say I don't have a clunker yet.
ENDP (Endo Pharmaceuticals Reports Strong Second Quarter 2009 Financial Results) is up 2.8% and up 25% since I bought it. They guided to the high end of their range, about $2.70 per share.
AIRV has to have one of the most convoluted press releases on earnings I have ever seen. They have weird revenue streams, so they use "billings" as a proxy. Then they're owed about 14m from a bankrupt Nortel, so all numbers are stated with them in and out. I do think they'll get most of that money,which would certainly boost the stock (Airvana Reports Second Quarter 2009 Financial Results). AIRV is also up about 3% today and 5% since I bought them. I like the space AIRV is in and here is a quote from their release:
“Airvana’s second quarter results exceeded our expectations as Billings grew 44 percent year-over-year,” said President and Chief Executive Officer, Randy Battat. “Both our EV-DO and fixed-mobile convergence (“FMC”) product lines continued to perform well, and the business continued to generate solid profitability and healthy levels of operating cash flow. This enabled us to repurchase an additional $3.7 million of our common stock during the quarter while adding $12.6 million in cash and investments to our balance sheet, raising our total cash and investments to $211.0 million.”
“Our Billings in the second quarter reflected a significant increase in EV-DO product shipments,” Battat said. “Driven in large part by the popularity of smart phones, PDAs and other devices, mobile data traffic at major operators continues to be the fastest-growing segment of the telecommunications market. This is generating strong demand for Airvana’s EV-DO products as operators strengthen and expand their 3G networks. The growth in second quarter Billings reflected new coverage deployments and expansion of existing deployments – particularly in the North American market – as well as growing demand for our radio network controllers and new channel cards for second and even third EV-DO carriers as operators expand the capacity of their existing EV-DO networks.”
“Airvana made significant strides in FMC product and partnership development in the second quarter,” said Battat. “FMC Billings growth in the second quarter reflected shipments of prototype and trial equipment to operators with active femtocell programs worldwide, as well as engineering services to develop femtocell features requested by key operators.”
I think they have pretty good upside once the NT deal is behind them and they start working with Ericsson.
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5 comments:
You indicated that you have had substantial gains (140%) but are still down. My daily MFI experience seems to be different as your losses and gains seem to be substantially greater.
For comparison, I am only up about 50% since November 21 but am also down just a few per cent overall. For the calendar year 2008, I was only(!) down 29% versus 36% for the s&p. For the current year, I am up about 25% versus 10% for the s&p.
My question is whether you followed the MFI procedure for the past few years or had modified it to some degree. If so, I am curious as to the modifications. I'm trying to understand if there is substantial variation among individuals that actually follow the MFI procedure.
As you know from my posting on yahoo groups, I try to follow the procedure as outlined in the book. Thank you.
There is no doubt that I have not held very true to the formula. I have sold early, I have bought stocks not on the screen and I haven't always bought equal $ amounts.
That being said, I don't think my overall result of down about 8% is out of line.
1. It is ahead of the indices.
2. My monthly tracking portfolios show that if you had bought every month since January 2006, you'd be down an average of about 0.7% per year Compound that for 3.5 years and you'd be down 2.5%. But I did not just put money in 2006 (which was an excellent year. I also put in new money (about 40% of my total) in 2007, which was a lousy year and some one starting 1/1/07 would be down 6.2% per year or 22% overall. So I feel my 8% drop is on par with the average of -22% ( starting in 2007) and -2.5% (starting in 2006).
I think my greater volatility is driven more by the stocks I have historically selected, which have admittedly been high beta stocks.
Long story short, I have convinced myself that not following the prescribed approach has not hurt my performance (I am a mathematician). However, I am moving closer to the book as I believe it is a better approach.
I am now buying equal dollar amounts and holding for the year. I am not necessarily buying 25 to 30 stocks, nor am I buying 5 to 7 at a time. But rather I am buying on Mondays when new stocks show up in my mechanical screens.
My calendar year results are a little difficult to measure as I was investing during the first two years. But without adjustments that would give you:
2006: +10%
2007: -7%
2008: -41%
2009: +66%
MG
One final point. Probably the best measure is that I am 16 points ahead of the Russell 3000 index. By my measure, if you had equally invested every month since January 2006 you'd be about 1.5 points ahead per stock year, which would work out to being 5.3 points ahead of the index thus far. So I do feel good about my 16 point margin.
MG
I notice that you use the Russell 3000 index and had a question about that.
For example, you listed for 2/26/2008 as MFI -51.7% and IWV as only down -26.9%. I was curious as to the large disparity between your MFI 50 stock portfolio and the Russell 3000. When I checked the Russell 3000 for the one period ending 2/26/2009, the Russell 3000 was down more than 44%. In my own MFI, I was down about 38%,
I also checked 3/24/2008 -40.9% -24.7%. When I looked up the Russell 3000 for the period ending 3/24/2009, it showed a loss of about 40%. In my own MFI, I was down about 31%.
I then gave up as I figured I must have erred in the Russell 3000 numbers.
Would you mind looking at the Russell 3000 for those two periods again?
good eye. I had forgotten to value the benchmarks, which freezes them at their anniversary. That changes the outperformance if MFI overall from -0.7%/-1.9% to -0.7%/-3.2%.
2/26/2008 -51.7% -44.0%
3/24/2008 -40.9% -39.1%
4/25/2008 -25.6% -36.5%
5/28/2008 -22.2% -33.6%
MG
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