Another year has zipped by, I celebrated the New Year in Boston with a small glass of champagne.
As my faithful readers know, I have been tracking the Magic Formula Stocks as described by Joel Greenblatt in The Little Book That Beats the Stock Market since January 2006. Every month I take the top 50 stocks over $100m market cap from his website and track how that portfolio of stocks fares versus the Ruseell 3000 for the next 12 months. It has been an uphill struggle as the tracking portfolios have under-performed, driven in part by Chinese reverse merger fiascos, for-profit education stocks and home health care stocks all being proverbial albatrosses.
This month-end was sadly no different, going up a solid 9.9%, but still getting thrashed by the R3K, which was up a more solid 15.9%! Here are the 50 stocks in descending performance order:
| Stock | Initial Price | End Price | Percent Change | 52 week low | Mkt Cap |
| CRAY | 6.61 | 15.95 | 141.3% | 6.09 | 239 |
| EXPE | 29.06 | 61.44 | 111.4% | 28.02 | 3,947 |
| MEDW | 12.63 | 22.00 | 74.2% | N/A | 103 |
| LPS | 14.60 | 24.62 | 68.6% | 14.16 | 1,252 |
| ASTX | 1.76 | 2.91 | 65.3% | 1.57 | 163 |
| GTIV | 6.73 | 10.05 | 49.3% | 5.13 | 206 |
| MDF | 7.66 | 11.26 | 47.0% | 7.22 | 315 |
| DLX | 21.98 | 32.24 | 46.7% | 21.40 | 1,160 |
| EGY | 6.08 | 8.65 | 42.3% | 5.61 | 347 |
| VECO | 20.98 | 29.49 | 40.6% | 21.12 | 812 |
| AFAM | 15.04 | 20.26 | 34.7% | 16.08 | 155 |
| KLIC | 9.34 | 11.99 | 28.4% | 8.05 | 680 |
| XLS | 8.82 | 11.27 | 27.8% | 8.99 | 1,691 |
| TER | 13.49 | 16.89 | 25.2% | 12.95 | 2,484 |
| PDLI | 5.65 | 7.04 | 24.6% | 6.00 | 860 |
| RTN | 46.93 | 57.56 | 22.7% | 47.50 | 16,973 |
| NOC | 56.91 | 67.58 | 18.7% | 56.59 | 15,638 |
| FRX | 30.28 | 35.32 | 16.6% | 30.09 | 8,089 |
| SAVE | 15.38 | 17.73 | 15.3% | 13.90 | 1,116 |
| PETS | 9.73 | 11.10 | 14.1% | 9.15 | 210 |
| AMAT | 10.45 | 11.44 | 9.5% | 9.95 | 13,948 |
| NVMI | 7.31 | 7.98 | 9.2% | 6.82 | 185 |
| USNA | 30.55 | 32.93 | 7.8% | 30.51 | 457 |
| DLB | 27.33 | 29.33 | 7.3% | 28.66 | 3,371 |
| PWER | 3.83 | 4.11 | 7.3% | 3.51 | 398 |
| GME | 23.46 | 25.09 | 6.9% | 15.32 | 3,370 |
| AMED | 10.66 | 11.31 | 6.1% | 9.35 | 320 |
| MSFT | 25.30 | 26.71 | 5.6% | 26.26 | 218,828 |
| CJES | 20.89 | 21.44 | 2.6% | 16.05 | 1,084 |
| TNAV | 7.84 | 7.99 | 1.9% | 5.05 | 323 |
| KLAC | 47.31 | 47.76 | 1.0% | 43.21 | 8,130 |
| TSRA | 16.64 | 16.45 | -1.1% | 12.77 | 869 |
| LRCX | 37.05 | 36.13 | -2.5% | 31.17 | 4,524 |
| SAI | 11.93 | 11.32 | -5.1% | 10.31 | 4,198 |
| VG | 2.50 | 2.37 | -5.2% | 1.63 | 564 |
| UIS | 19.65 | 17.30 | -12.0% | 14.40 | 853 |
| SNDK | 49.43 | 43.50 | -12.0% | 30.99 | 11,878 |
| USMO | 13.30 | 11.68 | -12.2% | 10.34 | 312 |
| MANT | 30.60 | 25.94 | -15.2% | 19.74 | 1,163 |
| NSU | 5.25 | 4.28 | -18.5% | 2.68 | 1,077 |
| VPHM | 27.93 | 22.76 | -18.5% | 19.02 | 1,970 |
| CPLA | 35.70 | 28.23 | -20.9% | 25.81 | 523 |
| CPIX | 5.66 | 4.20 | -25.8% | 4.10 | 114 |
| GNI | 95.12 | 67.20 | -29.4% | 58.90 | 169 |
| DELL | 14.53 | 10.14 | -30.2% | 8.69 | 26,494 |
| MNTA | 17.47 | 11.79 | -32.5% | 10.05 | 895 |
| CECO | 7.82 | 3.51 | -55.1% | 2.51 | 594 |
| GTAT | 7.11 | 3.03 | -57.4% | 2.82 | 904 |
| APOL | 54.08 | 20.92 | -61.3% | 18.36 | 7,056 |
| ESI | 57.56 | 17.31 | -69.9% | 16.37 | 1,535 |
Feel like we have heard this song before? Just looking at bottomfour , I think we can fairly state that for Profit Education was a drag. But they had plenty of company. I will say that this month there were some very good choices. CRAY was most excellent for a start.
Here is a listing of every monthly portfolio I have tracked.
| Date | Total | IWV |
| 1/6/2006 | 16.0% | 10.9% |
| 2/17/2006 | 21.2% | 14.6% |
| 3/29/2006 | 13.0% | 9.6% |
| 4/7/2006 | 10.3% | 12.1% |
| 5/12/2006 | 20.4% | 18.6% |
| 5/31/2006 | 29.2% | 23.3% |
| 6/30/2006 | 22.4% | 20.0% |
| 7/31/2006 | 19.7% | 17.3% |
| 8/31/2006 | 13.0% | 13.3% |
| 9/28/2006 | 12.7% | 14.6% |
| 10/27/2006 | 10.3% | 12.0% |
| 11/29/2006 | -0.3% | 4.8% |
| 12/28/2006 | -6.9% | 3.4% |
| 1/26/2007 | -10.2% | -6.6% |
| 2/27/2007 | -3.7% | -1.0% |
| 3/26/2007 | -9.8% | -5.5% |
| 4/27/2007 | -10.9% | -5.0% |
| 5/29/2007 | -11.5% | -6.3% |
| 7/3/2007 | -30.0% | -15.6% |
| 7/30/2007 | -19.9% | -11.5% |
| 8/30/2007 | -12.5% | -8.7% |
| 9/27/2007 | -19.0% | -18.2% |
| 11/2/2007 | -40.4% | -34.3% |
| 11/28/2007 | -40.1% | -38.3% |
| 12/28/2007 | -36.3% | -40.0% |
| 1/25/2008 | -36.4% | -35.9% |
| 2/26/2008 | -51.7% | -41.5% |
| 3/24/2008 | -40.9% | -36.8% |
| 4/25/2008 | -25.6% | -31.0% |
| 5/28/2008 | -22.2% | -33.6% |
| 7/2/2008 | -11.7% | -25.3% |
| 7/29/2008 | -10.5% | -20.9% |
| 8/29/2008 | -13.8% | -17.9% |
| 9/26/2008 | -4.3% | -10.0% |
| 10/31/2008 | 18.7% | 13.9% |
| 11/26/2008 | 50.9% | 27.7% |
| 12/26/2008 | 48.9% | 32.3% |
| 1/23/2009 | 59.3% | 36.4% |
| 2/27/2009 | 92.8% | 55.6% |
| 3/27/2009 | 85.8% | 48.1% |
| 4/24/2009 | 69.7% | 45.8% |
| 5/29/2009 | 31.8% | 22.8% |
| 6/29/2009 | 21.3% | 24.0% |
| 7/29/2009 | 19.5% | 15.9% |
| 8/28/2009 | 7.4% | 8.8% |
| 9/25/2009 | 12.6% | 12.4% |
| 10/30/2009 | 22.7% | 18.3% |
| 11/27/2009 | 24.3% | 13.6% |
| 12/31/2009 | 23.7% | 18.1% |
| 1/22/2010 | 19.0% | 20.6% |
| 2/26/2010 | 18.6% | 23.6% |
| 3/25/2010 | 10.0% | 15.4% |
| 4/23/2010 | 7.1% | 11.4% |
| 5/28/2010 | 19.3% | 25.4% |
| 6/29/2010 | 16.7% | 25.7% |
| 7/29/2010 | 5.4% | 20.1% |
| 9/2/2010 | 7.3% | 10.1% |
| 9/24/2010 | -4.3% | 0.3% |
| 10/29/2010 | -2.9% | 10.4% |
| 11/26/2010 | -8.5% | 1.4% |
| 1/3/2011 | -11.4% | 0.1% |
| 1/28/2011 | -7.6% | 4.9% |
| 2/25/2011 | -5.5% | 5.0% |
| 3/24/2011 | -4.4% | 7.4% |
| 4/21/2011 | -16.0% | 3.2% |
| 5/27/2011 | -12.0% | -0.4% |
| 6/24/2011 | -9.5% | 5.0% |
| 7/29/2011 | -4.3% | 8.1% |
| 8/26/2011 | 12.0% | 21.6% |
| 9/30/2011 | 23.5% | 29.6% |
| 10/28/2011 | 0.4% | 11.5% |
| 11/25/2011 | 13.9% | 24.0% |
| 12/29/2011 | 9.9% | 15.9% |
| 1/27/2012 | 2.2% | 10.4% |
| 2/24/2012 | 1.9% | 6.1% |
| 3/23/2012 | -2.2% | 4.0% |
| 4/27/2012 | 0.3% | 3.4% |
| 5/25/2012 | 6.1% | 10.1% |
| 6/22/2012 | 7.3% | 9.0% |
| 7/27/2012 | 3.0% | 4.9% |
| 8/24/2012 | -0.8% | 2.8% |
| 9/28/2012 | -2.0% | 0.5% |
| 10/26/2012 | 1.6% | 2.3% |
| 11/23/2012 | 2.4% | 2.1% |
| Grand Total | 4.7% | 5.7% |
You will note the sad fact that this is the 24th straight portfolio to lose (that is hard to do... it ain't random) and remarkably the next 10 open portfolios are trailing as well. Maybe we should buy a dartboard instead of using this? Or maybe we should SHORT all these stocks? Hmmm. If you go back and see my posts the last few months, the words don't change... just the count.
Subsets
I also keep 2 subsets of the larger portfolios: (1) dividend stocks (those with a yield per Yahoo of at least 2.6%) and (2) new stocks (those new to the tracking portfolios in past 12 months. The dividend portfolio was decent, up about 8.6%. The new portfolio was just okay, up 6.6%. Finally, I like to track cash as it is more "honest" than percentages as if you go up by 25% and then down by 25%, that is a different result than up by 5% then down by 5%. So I track what you would have to day if you had spread $100,000 over the first twelve portfolios evenly.
| Category | Value |
| Total | 114,406 |
| Total New | 110,427 |
| Total Dividend | 251,351 |
| Total Russell 3K | 128,333 |
As you will note, buying"new" stocks has not been a winning play, but dividend/mfi stocks continue to do well. They were up 25% from December 2011:
| Stock | Initial Price | End Price | Percent Change |
| EXPE | 29.06 | 61.44 | 111.4% |
| LPS | 14.60 | 24.62 | 68.6% |
| DLX | 21.98 | 32.24 | 46.7% |
| PDLI | 5.65 | 7.04 | 24.6% |
| RTN | 46.93 | 57.56 | 22.7% |
| NOC | 56.91 | 67.58 | 18.7% |
| PETS | 9.73 | 11.10 | 14.1% |
| AMAT | 10.45 | 11.44 | 9.5% |
| MSFT | 25.30 | 26.71 | 5.6% |
| USMO | 13.30 | 11.68 | -12.2% |
| GNI | 95.12 | 67.20 | -29.4% |
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