July 27th 2012 Monthly MFI Tracking Portfolio

Oops! With my travel over the weekend, I forgot to close out my July 27th 2012 Monthly Tracking Portfolio. So it went one day longer than it was supposed to go.  Hopefully, no big deal!

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.

 Last month-end broke a 29 month losing streak.  This month-end extended the winning streak to 2! It went up an excellent 30.4 %,edging the R3K, which was up a less excellent 25.7%!  Here are the 50 stocks in descending performance order:

Stock	Initial Price	End Price	Percent Change	52 week low
GME	15.48	45.39	193%	15.32
VG	1.65	3.40	106%	1.76
UNTD	3.99	7.85	97%	4.20
HRB	15.61	30.47	95%	15.53
CPLA	26.24	48.90	86%	25.81
PETS	9.21	16.36	78%	9.43
USNA	45.00	78.94	75%	30.51
SAVE	20.69	35.39	71%	15.64
CSCO	15.23	25.33	66%	15.65
BKE	35.39	56.21	59%	36.80
JCOM	28.63	45.16	58%	27.72
VIAB	45.87	72.28	58%	44.85
APEI	25.77	39.41	53%	24.88
SAI	10.02	14.95	49%	10.69
VPHM	23.49	34.96	49%	19.58
TW	57.95	83.86	45%	49.74
QSII	15.65	22.00	41%	15.94
EXPR	16.50	22.78	38%	10.47
KFY	14.05	19.39	38%	12.73
MANT	21.14	28.88	37%	19.74
CSGS	17.59	23.56	34%	16.99
TZOO	21.87	28.92	32%	16.56
RTN	53.74	70.95	32%	52.24
VCI	21.44	27.98	31%	22.15
PDLI	6.29	8.15	30%	6.50
NATR	15.26	18.53	21%	12.91
USMO	12.88	15.53	21%	10.34
KLIC	9.61	11.40	19%	9.41
MNTA	14.79	17.49	18%	10.05
BODY	10.51	12.16	16%	7.46
GNI	61.10	68.95	13%	61.50
DELL	11.70	12.87	10%	8.69
DHX	7.80	8.52	9%	7.44
MSFT	28.88	31.54	9%	26.26
AGX	15.01	16.02	7%	13.90
DLB	31.29	33.00	5%	28.66
CJES	18.69	19.34	3%	17.45
TNAV	5.95	6.11	3%	4.91
CF	198.73	202.30	2%	169.33
VECO	34.50	35.00	1%	26.15
AFAM	20.34	19.52	-4%	17.66
GTAT	5.02	4.75	-5%	2.61
CPIX	6.08	5.59	-8%	4.03
NSU	3.60	3.30	-8%	2.65
POZN	6.69	5.73	-14%	4.26
UTSI	3.27	2.78	-15%	2.05
EGY	7.35	6.02	-18%	5.16
APOL	28.39	18.30	-36%	15.98
ESI	43.43	27.25	-37%	11.69
STRA	74.40	43.99	-41%	42.98

As you can see, the Education stocks were (again) laggards. If you pull them out, you were up 33.2%. And there were four stocks up 90% or more.  I do think things are changing.  You can see that in the next table!

Here is a listing of every 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	7.8%	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	30.4%	25.7%
8/24/2012	26.0%	23.2%
9/28/2012	31.0%	20.4%
10/26/2012	35.8%	22.5%
11/23/2012	30.0%	22.3%
12/31/2012	30.4%	19.8%
1/25/2013	21.5%	13.5%
2/22/2013	21.7%	12.3%
3/28/2013	18.4%	8.1%
4/26/2013	17.6%	7.4%
5/24/2013	7.1%	2.9%
6/28/2013	8.0%	4.8%

As noted, this is the second straight portfolio to win after 29 straight losses! (that is hard to do... it ain't random).  However ALL 11 open portfolios are leading the Russell 3000 (by an average of almost 8 points - that is double the 4 points from a month ago!).  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 37.5%.  The new portfolio was solid okay, up 35.9%.  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	147,289
Total New	150,504
Total Dividend	334,413
Total Russell 3K	153,229

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

Stock	Initial Price	End Price	Percent Change	Yield
UNTD	3.99	7.85	96.7%	10.0%
HRB	15.61	30.47	95.2%	4.8%
PETS	9.21	16.36	77.6%	6.0%
BKE	35.39	56.21	58.8%	8.6%
JCOM	28.63	45.16	57.7%	2.9%
QSII	15.65	22.00	40.6%	4.5%
MANT	21.14	28.88	36.6%	4.0%
RTN	53.74	70.95	32.0%	3.5%
PDLI	6.29	8.15	29.6%	9.5%
USMO	12.88	15.53	20.6%	7.8%
GNI	61.10	68.95	12.8%	24.5%
MSFT	28.88	31.54	9.2%	2.6%
NSU	3.60	3.30	-8.3%	2.8%
STRA	74.40	43.99	-40.9%	5.4%

Stock	Initial Price	End Price	Percent Change	52 week low	Mkt Cap
APEI	25.77	39.41	52.9%	24.88	462
TW	57.95	83.86	44.7%	49.74	4,203
QSII	15.65	22.00	40.6%	15.94	966
TZOO	21.87	28.92	32.2%	16.56	349
DHX	7.80	8.52	9.2%	7.44	489

I don't know about you, but those are some pretty stellar results!  I came so close to buying TW last August.