Saturday, January 26, 2013

January 27th 2011 Monthly Tracking Portfolio

January 27th 2011 Tracking Portfolio

 Another month has zipped by. It is a very chilly Saturday morning here in New England.
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 7.4%, but still getting thrashed by the R3K, which was up a more solid 16.6%!  Here are the 50 stocks in descending performance order:


Stock  Initial Price   End Price  Percent Change  Mkt Cap 
CRAY                7.33           18.45 151.7%           269
EXPE              31.50           66.49 111.1%         4,185
MEDW              13.00           22.00 69.2%           107
DLX              24.50           36.31 48.2%         1,252
GTIV                7.23           10.25 41.8%           226
MDF                8.03           11.26 40.2%           329
HRB              15.97           22.33 39.8%         4,956
LPS              16.50           22.87 38.6%         1,396
CJES              16.74           23.02 37.5%           843
MRX              32.02           43.98 37.4%         1,976
VECO              24.37           32.89 35.0%           932
EGY                6.57             8.81 34.1%           360
UNTD                5.30             6.58 24.2%           502
IDCC              36.35           44.70 23.0%         1,655
SAVE              16.23           19.75 21.7%         1,146
XLS                9.50           11.35 19.5%         1,809
NOC              56.73           67.74 19.4%       15,752
NEMFF                8.26             9.84 19.1%           986
RTN              46.93           55.88 19.1%       17,257
AFAM              16.97           19.67 15.9%           172
AMED              10.04           11.60 15.5%           288
PDLI                5.87             6.71 14.3%           897
KLIC              11.16           12.59 12.8%           806
AMAT              11.96           12.83 7.3%       16,194
USNA              34.90           37.33 7.0%           516
SNDK              46.70           49.66 6.3%       11,147
NVMI                8.90             9.40 5.6%           214
VG                2.39             2.47 3.3%           532
GME              23.43           23.71 1.2%         3,418
TNAV                7.77             7.82 0.6%           319
SAI              12.20           12.13 -0.6%         4,399
MSFT              28.43           27.88 -1.9%     247,269
DLB              32.02           31.32 -2.2%         3,908
KFY              17.09           16.31 -4.6%           831
UIS              20.42           18.97 -7.1%           873
VPHM              29.85           27.28 -8.6%         2,068
PWER                4.53             4.05 -10.6%           476
USMO              13.43           11.38 -15.3%           314
MNTA              15.19           12.69 -16.5%           775
DELL              16.48           13.16 -20.1%       29,959
MANT              34.00           26.14 -23.1%         1,287
GNI            100.73           74.60 -25.9%           181
CPIX                6.10             4.08 -33.1%           122
CPLA              43.13           28.22 -34.6%           628
NSU                6.40             4.00 -37.5%         1,302
AVEO              13.25             7.80 -41.1%           575
APOL              54.46           20.70 -62.0%         6,868
GTAT                8.75             3.27 -62.6%         1,096
CECO              10.66             3.49 -67.3%           783
ESI              66.83           16.16 -75.8%         1,664

Feel like we have heard this song before? Just looking at three of the bottom four , 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. And some of those dividend stocks, like DLX and HRB were very solid. More on that later.

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 7.4% 16.6%
2/24/2012 7.0% 12.1%
3/23/2012 2.5% 9.8%
4/27/2012 0.9% 9.2%
5/25/2012 11.9% 16.2%
6/22/2012 14.3% 15.1%
7/27/2012 8.7% 10.7%
8/24/2012 3.7% 8.6%
9/28/2012 3.5% 6.1%
10/26/2012 8.1% 8.0%
11/23/2012 7.9% 7.8%
12/31/2012 6.2% 5.6%


You will note the sad fact that this is the 25th straight portfolio to lose (that is hard to do... it ain't random) and remarkably the next 8 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   120,432
Total New   117,468
Total Dividend   267,373
Total Russell 3K   135,383


As you will note, buying"new" stocks has not been a winning play, but dividend/mfi stocks continue to do well. They were up 15.5% from December 2011:

DLX              24.50           36.31 48.2%         1,252
HRB              15.97           22.33 39.8%         4,956
UNTD                5.30             6.58 24.2%           502
NOC              56.73           67.74 19.4%       15,752
RTN              46.93           55.88 19.1%       17,257
PDLI                5.87             6.71 14.3%           897
USMO              13.43           11.38 -15.3%           314
GNI            100.73           74.60 -25.9%           181

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