February 24th 2012 Monthly Tracking Portfolio

February 24th 2012 Monthly Tracking Portfolio

 Another month has zipped by. 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 Russell 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 8.7%, but still getting thrashed by the R3K, which was up a more solid 13.3%!  Here are the 50 stocks in descending performance order:

Stock	Initial Price	End Price	Percent Change	52 week low	Mkt Cap
CRAY	7.83	19.10	143.9%	6.55	285
ASTX	1.96	3.17	61.7%	1.57	182
DLX	24.48	38.80	58.5%	21.40	1,278
HRB	15.60	24.45	56.7%	14.35	4,722
ESIC	4.70	7.25	54.3%	N/A	149
OSIR	4.86	7.27	49.6%	4.47	159
GTIV	8.02	11.55	44.0%	5.13	243
ARTC	26.43	35.76	35.3%	24.13	706
PRX	37.28	50.00	34.1%	N/A	1,350
MRX	33.54	43.98	31.1%	N/A	2,041
MDF	8.71	11.26	29.3%	7.22	365
VIAB	46.44	58.80	26.6%	35.13	25,787
UIS	18.97	23.70	24.9%	14.40	832
PRSC	14.97	18.07	20.7%	9.56	196
NVMI	7.87	9.46	20.2%	6.82	201
ATVI	11.95	14.24	19.2%	10.45	13,902
KLAC	46.31	54.90	18.5%	43.21	8,095
PDLI	5.91	7.00	18.4%	6.02	894
USNA	38.44	45.43	18.2%	30.51	575
GME	22.05	25.33	14.9%	15.32	3,223
KFY	16.46	18.80	14.2%	12.10	797
NEMFF	8.69	9.84	13.2%	N/A	1,021
NOC	58.39	66.04	13.1%	56.59	15,137
FRX	32.29	36.41	12.8%	31.28	8,551
CJES	21.87	24.46	11.8%	16.15	1,174
RTN	48.99	54.05	10.3%	49.03	17,420
CSCO	19.68	21.11	7.2%	14.96	108,797
XLS	10.23	10.84	6.0%	9.01	1,949
VECO	28.83	30.13	4.5%	26.15	1,138
AMED	11.99	12.47	4.0%	9.51	346
PWER	4.67	4.77	2.1%	3.51	492
SNDK	49.14	50.06	1.9%	30.99	11,738
TNAV	7.47	7.52	0.7%	5.05	304
KLIC	11.24	11.23	-0.1%	8.05	822
SAI	12.09	11.75	-2.8%	10.31	4,351
EGY	8.48	8.13	-4.1%	6.88	484
DLB	34.49	31.67	-8.2%	28.66	4,197
MSFT	30.56	27.87	-8.8%	26.26	262,943
AFAM	23.17	20.80	-10.2%	17.87	226
USMO	13.27	11.40	-14.1%	10.34	311
NSU	4.16	3.45	-17.1%	2.68	853
DELL	17.15	13.83	-19.4%	8.69	31,233
VPHM	31.74	25.32	-20.2%	19.02	2,196
CPLA	41.45	32.60	-21.4%	25.81	576
MANT	33.56	25.93	-22.7%	19.74	1,283
MPAA	8.40	5.73	-31.8%	3.96	105
GTAT	9.02	3.39	-62.4%	2.82	1,110
APOL	52.14	19.13	-63.3%	18.36	6,601
CECO	11.93	4.07	-65.9%	2.51	875
ESI	74.21	18.78	-74.7%	11.69	1,890

Needless to say, with three For Profit Education Stocks bringing up the rear, this feels like

same song,
second verse,
a little bit louder,
a whole lot worse!

Here is a listing of every monthly portfolio I have tracked:

Average of Percent Change
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	8.7%	13.3%
3/23/2012	4.7%	10.9%
4/27/2012	4.2%	10.3%
5/25/2012	14.3%	17.5%
6/22/2012	15.8%	16.3%
7/27/2012	10.6%	11.9%
8/24/2012	5.8%	9.7%
9/28/2012	5.9%	7.2%
10/26/2012	10.1%	9.1%
11/23/2012	11.0%	9.0%
12/31/2012	7.4%	6.7%
1/25/2013	1.1%	1.1%

You will note the sad fact that this is the 26th straight portfolio to lose (that is hard to do... it ain't random) and remarkably the next 7 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	122,778
Total New	119,144
Total Dividend	273,540
Total Russell 3K	137,287

As you will note, buying"new" stocks has not been a winning play, but dividend/mfi stocks continue to do well. They were up 20% from February 2012:

Stock	Initial Price	End Price	Percent Change	Yield
DLX	24.48	39.66	62%	4.1%
HRB	15.6	24.66	58%	4.2%
PDLI	5.91	7.03	19%	10.2%
KLAC	46.31	54.78	18%	2.8%
NOC	58.39	65.97	13%	14.3%
RTN	48.99	54.44	11%	3.5%
MSFT	30.56	27.76	-9%	2.6%
USMO	13.27	11.66	-12%	7.5%

DLX has been on fire!