September 28th 2012 Monthly Tracking Portfolio

September 28th 2012 Monthly Tracking Portfolio

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.

 Fearless readers will recall we had a 29 month "losing streak"..  This month-end extended the winning streak to 4! It went up an excellent 39.3 %,stomping the R3K, which was up a less excellent 22.1%!  Here are the 50 stocks in descending performance order:

Stock	Initial Price	End Price	Percent Change	52 week low	Mkt Cap
QCOR	17.94	56.90	217.2%	17.25	1,064
UBNT	11.74	34.03	189.9%	9.97	1,085
NUS	38.06	98.76	159.5%	32.36	2,279
GME	20.30	49.65	144.6%	20.55	2,605
TW	52.62	108.16	105.5%	49.74	3,840
SAVE	17.08	34.40	101.4%	15.64	1,259
USNA	46.47	87.20	87.6%	30.51	655
ICON	18.24	33.04	81.1%	17.91	1,301
WCRX	13.04	23.11	77.2%	10.85	3,334
PETS	9.58	16.38	71.0%	9.82	204
EXPR	14.82	23.84	60.9%	10.47	1,299
CPLA	35.06	56.24	60.4%	26.38	467
RPXC	11.19	17.64	57.6%	8.55	595
HRB	16.77	26.36	57.2%	16.44	4,698
JCOM	31.78	49.58	56.0%	28.08	1,454
GTAT	5.45	8.39	53.9%	2.61	629
SAI	10.81	16.03	48.3%	10.69	4,131
STX	29.66	43.51	46.7%	24.90	12,397
RTN	55.18	78.74	42.7%	52.24	19,103
DELL	9.67	13.78	42.5%	8.69	17,379
DLX	29.73	41.22	38.6%	28.33	1,549
VG	2.28	3.15	38.2%	2.12	517
CACI	51.79	69.21	33.6%	48.56	1,269
KLAC	46.26	60.91	31.7%	43.21	7,985
NATR	14.73	19.20	30.3%	12.91	258
AGX	16.85	21.82	29.5%	13.90	242
CSCO	18.54	23.33	25.8%	16.68	99,576
MANT	23.41	28.80	23.0%	21.58	893
USMO	11.41	14.00	22.7%	10.34	266
VECO	30.00	36.28	20.9%	26.15	1,206
UIS	20.82	25.13	20.7%	15.04	945
LPS	27.49	33.18	20.7%	21.23	2,359
DLB	29.05	34.39	18.4%	28.66	3,588
PDLI	7.12	8.24	15.7%	6.50	1,073
MSFT	28.87	33.27	15.2%	26.26	252,771
KLIC	10.41	11.54	10.9%	9.41	772
GNI	67.87	72.35	6.6%	61.50	124
DHX	8.42	8.58	1.9%	7.89	533
AFAM	19.32	19.39	0.4%	17.66	200
TNAV	5.97	5.93	-0.7%	4.91	246
INTX	9.16	8.91	-2.7%	7.83	190
ESI	32.23	30.97	-3.9%	11.69	753
CF	220.46	210.48	-4.5%	169.33	13,789
UTSI	3.09	2.78	-10.0%	2.05	156
POZN	6.63	5.84	-11.9%	4.26	201
NSU	4.53	3.21	-29.1%	2.65	942
APOL	29.05	20.45	-29.6%	15.98	3,315
STRA	63.03	41.61	-34.0%	39.27	782
EGY	8.55	5.55	-35.1%	5.16	493
BODY	10.45	6.34	-39.3%	6.00	175

As you can see, the Education stocks were (again) laggards. If you pull them out, you were up 42.9%. And there were eight stocks up 80% or more.  I can not remember more than that.  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	39.3%	22.1%
10/26/2012	41.0%	24.2%
11/23/2012	36.9%	24.0%
12/31/2012	38.5%	21.5%
1/25/2013	30.2%	15.0%
2/22/2013	27.8%	13.8%
3/28/2013	26.8%	9.6%
4/26/2013	22.0%	8.9%
5/24/2013	11.0%	4.4%
6/28/2013	11.8%	6.2%
7/29/2013	4.9%	1.4%
8/30/2013	5.1%	4.2%

You can see that this is the best performer since April of 2009!

As noted, this is the fourth 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.

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	155,204
Total New	154,788
Total Dividend	354,581
Total Russell 3K	155,832

The new stocks did great, up 117%!  I actually bought QCOR at 19.07 in my dividend portfolio.  Sadly, I got nervous and sold for just a 14% gain.  I also owned QCOR once in my original MFI portfolio. I bought it in September 2009 for the paltry sum of $5.42.  I felt great selling it a year later for $11.08.  Oh well.

Date	Stock	Initial Price	End Price	Percent Change
9/28/2012	WCRX	13.04	23.11	77.2%
9/28/2012	RPXC	11.19	17.64	57.6%
9/28/2012	QCOR	17.94	56.90	217.2%