MFI Tracking - February 22nd Sneak Peek

Sneak Peek

As my regular readers know, I have been tracking a basket of fifty MFI stocks greater than $100m in market cap every month since January 2006. I hold each basket for a year and track it's results versus the Russell 3000.  I always try to start a new portfolio the last trading Friday of the month.  So last year that was February 22nd.  This year it is February 28th, so last year's portfolio will actually run 53 weeks.

Unless we get some weird stuff the final week, the 2/22/13 portfolio looks like a huge winner, up 46% versus 24.8% for the benchmark.  The table below shows some of the stocks I have owned within that portfolio. It does show why I have had a lot of success in past year:

Date	Stock	Initial Price	End Price	Percent Change	Mkt Cap
2/22/2013	GTAT	3.15	12.11	284%	375
2/22/2013	NUS	37.78	80.05	112%	2,246
2/22/2013	AGX	17.34	28.20	63%	250
2/22/2013	STRZA	19.28	31.15	62%	2,452
2/22/2013	LPS	24.84	37.30	50%	2,137
2/22/2013	ATVI	14.32	19.72	38%	16,121
2/22/2013	AAPL	439.69	525.25	19%	423,298
2/22/2013	NSU	3.66	3.99	9%	763

This Week's Barron's

I gave today's Barron's a quick read this morning.  They were really down on KMP (Kinder Morgan: Trouble in the Pipelines?), suggesting that their non-GAAP measures were biased and that the General Partners are being enriched due to the way things are done. I did quite well in the pipeline MLP space, but with my sale of KMF last year I am out of it.

There was a very interesting article on dividend investing (Four Stocks With Dividends That Could Double).  The focus was on dividend growth stocks as opposed to yield.  They made the argument that the higher yielding stocks (think AT&T or utilities) will act more like bonds going forward, which could be bad for their share prices if rates go up.  I have been saying this since March last year and it does explain (in part) why my dividend portfolio has lagged recently. So they liked AIG, HAL, IR and DFS.  I'd suggest these are all (except for AIG) worthy of a look.  They have lowish dividends, but article suggests dividend could double in 5 year horizon.

May MFI Tranche

I suppose it is never to early to start thinking about my next tranche.  Here are the five stocks coming up to their anniversary May 6th:

5/6/2013	Start	Current	Dividend	Pct Gain	R3K Gain
KLIC	$11.40	$11.55	$0.00	1.3%	16.9%
CYOU	$29.24	$28.87	$0.00	-1.3%	16.9%
RDA	$9.74	$18.04	$0.10	86.3%	16.9%
NVDA	$13.85	$18.64	$0.24	36.3%	16.9%
CF	$183.97	$242.97	$2.80	33.6%	16.9%
Totals				31.3%	16.9%

You can see that it has been a solid out-performance (so far).  Really helped by RDA buyout and great recent earnings from CF and NVDA. KLIC and CYOU have lagged, but that is why it is treated as a tranche.

I did put together a first shot at five stocks in May.  I am still thinking larger cap stocks are the space I want to be in, I am worried about over-extension of IWM.  I had listed MO, SYMC, K, CSCO and SAIC.  I think CSCO is a non-starter now. K is one I would buy today; who doesn't like cereal? Perusing the top 50 list, here are some names that I will likely look at:

AAPL, BR, K, NCI, PM, SYMC, WNR and SNDK.  Then from stocks not on the list, NTES (a competitor of GA and CYOU) looks interesting. Actually, PM looks very interesting.  That may be a dividend portfolio buy next week.