M&A Picking Up?

Buffett Buys Heinz

Well,  I guess if you own a bunch of Coca-Cola, you might as well buy Heinz.  Great, iconic American Companies.  Does it make you mad when you hear people say we do not make anything here in America?

Makes me feel a little vindicated on my comments in January that I felt 2013 was going to be the year of Mergers and Acquisitions. Large corporations have so much cash, it is cheap to borrow right now and there are still many companies trading at a reasonable price (though to be honest, I would not have put HNZ in that category).

M&A will be good for the stock market and it will be especially good for reasonably priced mid-cap stocks.

I believe I own a number of stocks that could be an M&A candidate: CA, DLB, KFY, SAI, STRZA and WU off the top of my head.

MFI appears to be benefitting.  Here is how the fifty stocks in my MFI index did during the past week and for the year thus far:

Stock	Start	Last Week	Current	YTD Change	Weekly Change
APOL	20.92	20.30	19.01	-9.1%	-6.4%
AGX	18.00	17.16	17.29	-3.9%	0.8%
BAH	13.92	13.39	12.91	-7.3%	-3.6%
CA	21.98	25.02	25.05	14.0%	0.1%
CPLA	28.23	29.89	32.03	13.5%	7.2%
CF	203.16	226.16	216.67	6.6%	-4.2%
CSCO	19.65	21.16	20.99	6.8%	-0.8%
DELL	10.14	13.63	13.81	36.2%	1.3%
DLX	32.24	37.72	38.98	20.9%	3.3%
DMRC	20.70	21.31	22.94	10.8%	7.6%
DLB	29.33	31.74	31.73	8.2%	0.0%
GME	25.09	26.06	25.37	1.1%	-2.6%
GNI	67.20	75.76	76.30	13.5%	0.7%
GTAT	3.03	3.20	3.65	20.5%	14.1%
HLF	32.94	35.85	38.74	17.6%	8.1%
HFC	46.55	56.26	55.55	19.3%	-1.3%
IDCC	41.09	44.66	44.73	8.9%	0.2%
INTX	9.48	9.98	9.93	4.7%	-0.5%
ESI	17.31	17.10	18.34	6.0%	7.3%
JCOM	30.60	31.52	36.21	18.3%	14.9%
KLIC	11.99	11.49	11.48	-4.3%	-0.1%
LPS	24.62	25.40	25.09	1.9%	-1.2%
MANT	25.94	25.16	26.02	0.3%	3.4%
MSFT	26.71	27.55	28.01	4.9%	1.7%
NATR	14.48	15.00	14.97	3.4%	-0.2%
NSU	4.28	4.01	3.79	-11.4%	-5.5%
NTI	25.44	29.00	30.15	18.5%	4.0%
NUS	37.05	41.86	41.27	11.4%	-1.4%
PDLI	7.04	6.88	6.94	-1.4%	0.9%
PETS	11.10	13.25	13.13	18.3%	-0.9%
PBI	10.64	13.84	13.83	29.9%	-0.1%
POOSF	1.42	1.46	0.18	-87.3%	-87.7%
POZN	5.01	5.71	6.31	25.9%	10.5%
QCOR	26.72	26.40	28.65	7.2%	8.5%
RTN	57.56	54.16	53.98	-6.2%	-0.3%
RPXC	9.04	10.73	12.94	43.1%	20.6%
SAI	11.32	12.14	12.36	9.2%	1.8%
STX	30.42	35.48	34.45	13.2%	-2.9%
SVLC	2.52	2.57	2.28	-9.5%	-11.3%
SAVE	17.73	19.51	19.38	9.3%	-0.7%
STRA	56.17	61.56	51.95	-7.5%	-15.6%
TNAV	7.99	7.22	7.62	-4.6%	5.5%
TZOO	18.99	21.26	21.32	12.3%	0.3%
UIS	17.30	24.43	24.31	40.5%	-0.5%
USMO	11.68	11.30	11.56	-1.0%	2.3%
USNA	32.93	40.85	43.93	33.4%	7.5%
EGY	8.65	8.31	8.16	-5.7%	-1.8%
VCI	25.78	28.96	30.38	17.8%	4.9%
VG	2.37	2.44	2.69	13.5%	10.2%
WCRX	12.04	14.19	14.59	21.2%	2.8%
Total	11,656	12,578	12,595	8.1%	0.1%
Total x Education				8.7%	0.3%

The 8.1% gain is even more impressive when you look at the implosion of PSOOF.  At first I thought this was a typo.  But it is another MFI disaster stock... sure glad I did not buy it (Poseidon Concepts Corp. Provides Update on its Business, Operations and the Review of the Special Committee). The headline does not do it justice. Basically about $100m of the revenue for the first 9 months of the year (out of $148m of revenue) should not have been counted. Whoa. Can you spell F-R-A-U-D?

Looking at the closing prices, it appears the Icahn bump on HLF was short-lived.  I know they were trading pre market around $47 and now they are $38.  Anyone want to jump in the pool with the sharks?

Finally, I was looking at my MFI tracking portfolios. Now 5 of the open 12 portfolios are beating the Russell 3000. Not a rout by any stretch of the imagination. But for an approach that has seen two straight years of monthly portfolios lag the Russell 3000, it does suggest a turning of the tide.