MFI Tracking Portfolio - March 23rd, 2012

Another Tracking Portfolio That Trailed

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 9.1 %, but still getting thrashed by the R3K, which was up a more solid 15.2%!  Here are the 50 stocks in descending performance order:

 

Stock	Initial Price	End Price	Percent Change
OSIR	5.08	10.40	104.7%
HRB	16.08	29.42	83.0%
DLX	23.04	41.40	79.7%
ESIC	4.79	7.25	51.4%
ICON	17.61	25.87	46.9%
IDCC	34.37	47.87	39.3%
JCOM	29.10	39.21	34.7%
VIAB	45.69	61.48	34.6%
ARTC	26.28	34.76	32.3%
UNTD	4.59	6.03	31.4%
USNA	36.81	48.33	31.3%
VG	2.22	2.89	30.2%
GTIV	8.32	10.82	30.0%
VCI	23.22	29.87	28.6%
VECO	30.35	38.41	26.6%
PDLI	5.82	7.30	25.4%
CJES	18.32	22.90	25.0%
GME	22.66	27.97	23.4%
NOC	58.53	70.15	19.9%
RTN	50.32	58.79	16.8%
ATVI	12.71	14.57	14.6%
KFY	15.71	17.86	13.7%
UIS	20.28	22.75	12.2%
FRX	34.16	38.04	11.4%
NSU	3.44	3.83	11.3%
SNDK	49.40	54.96	11.3%
SAI	12.79	13.55	5.9%
LPS	24.35	25.46	4.6%
USMO	12.79	13.27	3.8%
NVMI	8.72	9.00	3.2%
DLB	33.84	33.56	-0.8%
NATR	15.93	15.24	-4.3%
TNAV	6.87	6.45	-6.1%
KLIC	12.37	11.56	-6.5%
XLS	11.80	10.89	-7.7%
NEMFF	10.84	9.84	-9.2%
AFAM	22.58	20.43	-9.5%
GNI	83.46	74.57	-10.7%
DELL	16.13	14.33	-11.2%
MNTA	15.60	13.34	-14.5%
VPHM	30.00	25.16	-16.1%
EXEL	5.54	4.62	-16.6%
CPLA	37.42	31.14	-16.8%
MANT	32.93	26.87	-18.4%
EGY	9.44	7.59	-19.6%
AMED	14.15	11.12	-21.4%
STRA	93.22	48.38	-48.1%
GTAT	7.92	3.30	-58.3%
APOL	42.41	17.38	-59.0%
ESI	65.52	13.78	-79.0%

As you can see, the Education stocks were (again) laggards. But even if you pull them out, you still trail. Kind of disheartening.

Here is a listing of every 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	7.8%	13.3%
3/23/2012	9.1%	15.2%
4/27/2012	10.9%	14.6%
5/25/2012	17.6%	22.0%
6/22/2012	20.1%	20.8%
7/27/2012	13.0%	16.3%
8/24/2012	8.3%	14.0%
9/28/2012	9.7%	11.4%
10/26/2012	13.2%	13.4%
11/23/2012	11.8%	13.2%
12/31/2012	9.6%	10.9%
1/25/2013	3.4%	5.0%
2/22/2013	3.0%	3.9%
Grand Total	6.0%	7.1%

 

You will note the sad fact that this is the 27th straight portfolio to lose (that is hard to do... it ain't random) and remarkably the next 11 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 most excellent, up about 22.2%.  The new portfolio was solid okay, up 17.9%.  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	126,400
Total New	128,012
Total Dividend	288,826
Total Russell 3K	142,280

Here are the dividend stocks and the new stocks from a year ago:

Stock	Initial Price	End Price	Percent Change	Yield
HRB	16.08	29.42	83.0%	4.2%
DLX	23.04	41.40	79.7%	4.2%
JCOM	29.10	39.21	34.7%	2.9%
UNTD	4.59	6.03	31.4%	8.7%
PDLI	5.82	7.30	25.4%	10.3%
NOC	58.53	70.15	19.9%	13.8%
RTN	50.32	58.79	16.8%	3.4%
SAI	12.79	13.55	5.9%	3.8%
USMO	12.79	13.27	3.8%	7.8%
GNI	83.46	74.57	-10.7%	14.7%
STRA	93.22	48.38	-48.1%	4.3%

Guess I was a blockhead for not buying HRB!

Stock	Initial Price	End Price	Percent Change	52 week low
ICON	17.61	25.87	46.9%	14.27
JCOM	29.10	39.21	34.7%	23.55
VCI	23.22	29.87	28.6%	18.70
NATR	15.93	15.24	-4.3%	12.66
EXEL	5.54	4.62	-16.6%	4.19