August 24th 2012 Monthly Tacking Portfolio

The August 24th 2012 monthly tracking portfolio was closed Friday.  It closed a week "late" as I try to push these back to last Friday of the month, which is sometimes a bit more than a year.

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.

 Fearless readers will recall we had a 29 month "losing streak"..  This month-end extended the winning streak to 3! It went up an excellent 26.0 %,stomping the R3K, which was up a less excellent 19.8%!  Here are the 50 stocks in descending performance order:

Stock	Initial Price	End Price	Percent Change	52 week low	Mkt Cap
UBNT	10.42	35.06	236.5%	9.97	827
GME	17.90	50.21	180.5%	19.83	2,353
NUS	41.71	83.71	100.7%	32.36	2,509
JCOM	27.24	49.24	80.8%	28.08	1,269
HRB	15.74	27.91	77.3%	15.90	4,782
USNA	43.16	75.95	76.0%	30.51	631
CPLA	31.94	54.35	70.2%	26.38	427
PETS	9.35	15.27	63.3%	9.63	196
SAVE	19.20	31.17	62.3%	15.64	1,404
VG	2.11	3.12	47.9%	2.06	476
DLX	27.52	39.35	43.0%	27.90	1,397
SAI	10.56	15.07	42.7%	10.69	4,008
RTN	53.87	75.41	40.0%	52.24	18,486
NATR	12.57	17.46	38.9%	11.90	230
EXPR	15.15	20.99	38.5%	10.47	1,308
MANT	21.07	28.45	35.0%	21.58	802
USMO	10.57	14.12	33.6%	10.34	242
CACI	52.23	67.40	29.0%	48.56	1,424
DELL	10.96	13.77	25.6%	8.69	19,456
CSCO	18.64	23.31	25.1%	16.68	100,884
FRX	34.68	42.53	22.6%	31.71	9,299
KFY	14.49	17.71	22.2%	12.83	701
UIS	21.16	25.16	18.9%	15.04	921
PDLI	6.74	7.94	17.8%	6.50	1,023
STX	32.63	38.32	17.4%	24.90	13,080
LPS	27.21	31.90	17.2%	21.23	2,332
EXEL	4.30	5.01	16.5%	4.26	638
GNI	62.36	70.51	13.1%	61.50	109
MSFT	29.64	33.40	12.7%	26.26	253,567
AGX	16.06	17.75	10.5%	13.90	215
BDSI	4.82	5.24	8.7%	3.52	140
DLB	30.13	31.43	4.3%	28.66	3,540
DHX	8.11	8.33	2.7%	7.60	507
GTAT	6.34	6.46	1.9%	2.61	755
MNTA	13.93	14.09	1.1%	10.05	701
MAXY	2.60	2.53	-2.7%	2.35	166
KLIC	11.43	11.06	-3.2%	9.41	831
AFAM	19.91	18.87	-5.2%	17.66	206
INTX	9.88	9.15	-7.4%	7.83	209
CF	205.93	190.34	-7.6%	169.33	12,950
ESI	31.41	28.81	-8.3%	11.69	749
TNAV	6.02	5.42	-10.0%	4.91	254
DMRC	21.18	19.01	-10.2%	17.68	151
UTSI	3.09	2.68	-13.3%	2.05	155
NSU	3.83	3.18	-17.0%	2.65	792
POZN	6.72	5.17	-23.1%	4.26	189
EGY	7.37	5.56	-24.6%	5.16	427
BODY	8.66	6.04	-30.3%	6.00	135
APOL	27.09	18.57	-31.5%	15.98	3,105
STRA	65.09	39.96	-38.6%	39.68	803

As you can see, the Education stocks were (again) laggards. If you pull them out, you were up 28.5%. And there were four stocks up 80% 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:

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	30.4%	25.7%
8/24/2012	26.0%	19.8%
9/28/2012	32.7%	17.1%
10/26/2012	33.9%	19.2%
11/23/2012	30.2%	19.0%
12/31/2012	31.5%	16.5%
1/25/2013	23.9%	10.4%
2/22/2013	22.1%	9.2%
3/28/2013	19.9%	5.1%
4/26/2013	15.6%	4.5%
5/24/2013	6.1%	0.1%
6/28/2013	7.4%	1.9%
7/29/2013	0.6%	-2.7%

As noted, this is the third 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 11 points - that is well above the 8 points from a month ago and double again the 4 points from previous month!).  S-M-O-K-I-N-G!!

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	148,302
Total New	149,375
Total Dividend	341,027
Total Russell 3K	150,085

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

Stock	Initial Price	End Price	Percent Change	Yield
GME	17.90	50.21	180.5%	3.1%
JCOM	27.24	49.24	80.8%	3.9%
HRB	15.74	27.91	77.3%	4.8%
PETS	9.35	15.27	63.3%	6.1%
DLX	27.52	39.35	43.0%	3.6%
RTN	53.87	75.41	40.0%	3.5%
MANT	21.07	28.45	35.0%	4.0%
USMO	10.57	14.12	33.6%	8.3%
CSCO	18.64	23.31	25.1%	3.0%
PDLI	6.74	7.94	17.8%	8.9%
STX	32.63	38.32	17.4%	3.1%
GNI	62.36	70.51	13.1%	24.1%
MSFT	29.64	33.40	12.7%	2.7%
INTX	9.88	9.15	-7.4%	8.1%
NSU	3.83	3.18	-17.0%	2.6%
STRA	65.09	39.96	-38.6%	6.1%

Stock	Initial Price	End Price	Percent Change	New
UBNT	10.42	35.06	236.5%	1
NUS	41.71	83.71	100.7%	1
CACI	52.23	67.40	29.0%	1
STX	32.63	38.32	17.4%	1
BDSI	4.82	5.24	8.7%	1
MAXY	2.60	2.53	-2.7%	1
DMRC	21.18	19.01	-10.2%	1

I don't know about you, but those are some pretty stellar results!  Just wish I had bought UBNT.