Sunday, June 30, 2013

MFI Tracking Portfolio - June 22nd 2012: Losing Streak Ends at 29!!!

June 22nd 2012 Tracking Portfolio

Another month has zipped by (in this case a month + a week). 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 broke a 29 month losing streak, going up an excellent 26.1 %,edging the R3K, which was up a less excellent 24.1%!  Here are the 50 stocks in descending performance order:

Stock  Initial Price   End Price  Percent Change  52 week low   Mkt Cap 
GME              16.96           42.03 147.8%                15.32         2,424
UNTD                3.76             7.58 101.6%                 3.63           380
TPX              22.03           43.90 99.3%                22.08         1,486
HRB              14.90           27.75 86.2%                15.53         4,668
USNA              40.39           72.38 79.2%                30.51           616
ICON              16.65           29.41 76.6%                16.13         1,238
IDCC              25.50           44.65 75.1%                22.66         1,330
JCOM              24.54           42.51 73.2%                23.55         1,205
SNDK              36.36           61.10 68.0%                32.08         8,887
BODY                8.44           13.32 57.8%                 7.46           145
BKE              34.27           52.02 51.8%                36.80         1,896
VG                1.88             2.83 50.5%                 1.63           454
VIAB              46.43           68.03 46.5%                35.13       24,930
CSCO              16.67           24.34 46.0%                14.96       92,426
DLX              23.78           34.65 45.7%                25.02         1,272
KFY              13.10           18.74 43.1%                12.73           688
UIS              15.67           22.07 40.8%                15.04           856
SAI              10.63           13.93 31.0%                10.69         4,145
PDLI                5.99             7.72 28.9%                 6.14           926
CSGS              17.03           21.78 27.9%                14.17           590
RTN              52.89           66.12 25.0%                52.24       18,731
CPLA              33.42           41.65 24.6%                25.81           472
VCI              19.78           24.59 24.3%                19.25           933
VPHM              23.16           28.65 23.7%                19.02         2,035
FRX              34.09           41.00 20.3%                31.28         9,294
KLIC                9.20           11.06 20.2%                 8.05           660
MANT              21.99           26.12 18.8%                19.74           865
NATR              13.79           16.35 18.6%                12.66           236
KLAC              47.01           55.73 18.5%                43.21         8,241
EXPR              17.76           20.97 18.1%                10.47         1,607
MSFT              29.79           34.55 16.0%                26.26     256,956
DELL              11.87           13.33 12.3%                 8.69       22,030
AGX              13.91           15.60 12.1%                13.20           191
USMO              12.13           13.57 11.9%                10.34           285
GNI              62.97           68.90 9.4%                61.11           113
CJES              18.58           19.37 4.3%                17.37           961
VECO              34.07           35.41 3.9%                26.15         1,332
CF            176.31         171.50 -2.7%              170.53       12,707
AFAM              19.79           19.09 -3.5%                17.87           210
DLB              37.07           33.45 -9.8%                28.66         4,438
TNAV                5.83             5.23 -10.3%                 5.05           254
MNTA              17.01           15.06 -11.5%                10.05           694
NSU                3.34             2.95 -11.7%                 2.65           650
EXEL                5.30             4.54 -14.3%                 4.19           821
GTAT                4.96             4.15 -16.3%                 2.61           625
POZN                6.26             5.01 -20.0%                 4.55           187
UTSI                3.51             2.66 -24.2%                 2.05           181
EGY                7.65             5.72 -25.2%                 5.16           495
APOL              33.55           17.72 -47.2%                15.98         4,103
ESI              55.53           24.40 -56.1%                11.69         1,466

As you can see, the Education stocks were (again) laggards. If you pull them out, you were up 29.5%. And there were three stocks up right at 100%.  I do think things are changing.  You can see that in the next table!

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 10.5% 15.3%
5/25/2012 26.5% 27.5%
6/22/2012 26.1% 24.6%
7/27/2012 21.0% 19.9%
8/24/2012 16.5% 17.6%
9/28/2012 21.0% 14.9%
10/26/2012 26.0% 16.9%
11/23/2012 21.0% 16.8%
12/31/2012 19.5% 14.3%
1/25/2013 12.0% 8.3%
2/22/2013 12.1% 7.2%
3/28/2013 8.8% 3.1%
4/26/2013 8.5% 2.5%
5/24/2013 -0.4% -1.8%

As noted, this is the first portfolio to win in the past 30! (that is hard to do... it ain't random).  However ALL 11 open portfolios are leading the Russell 3000 (by an average of almost 4 points).  This is the first time I have seen this in centuries.  Ok, that isn't true, but it feels like centuries!

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 34.7%.  The new portfolio was solid okay, up 13.5%.  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   136,931
Total New   140,334
Total Dividend   313,822
Total Russell 3K   147,401

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

Stock  Initial Price   End Price  Percent Change Yield
UNTD                3.76             7.58 101.6% 10.6%
HRB              14.90           27.75 86.2% 5.0%
JCOM              24.54           42.51 73.2% 3.4%
BKE              34.27           52.02 51.8% 8.9%
DLX              23.78           34.65 45.7% 4.2%
PDLI                5.99             7.72 28.9% 10.0%
MANT              21.99           26.12 18.8% 3.8%
KLAC              47.01           55.73 18.5% 3.0%
USMO              12.13           13.57 11.9% 8.2%
GNI              62.97           68.90 9.4% 23.8%
NSU                3.34             2.95 -11.7% 3.0%

I don't know about you, but those are some pretty stellar results!  39.5% on average.  I should have had more faith and been picking more from this group.

Stock  Initial Price   End Price  Percent Change
TPX              22.03           43.90 99.3%
BKE              34.27           52.02 51.8%

Wow!  Only two stocks, but up 75%!  Maybe a change here as well.  Of the 11 open new portfolios, they are up an average of 20% versus 11% for open Russell 3000.

I will post more later this weekend.

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