February 22nd 2013 Monthly Tracking Portfolio

February 22nd 2013 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 9! It went up an excellent 46.5 %,stomping the R3K, which was up a less excellent 26.4%! Here are the 50 stocks in descending performance order (just a stunning list of successes this month):

Stock	Initial Price	End Price	Percent Change	52 week low	Mkt Cap
GTAT	3.15	14.33	354.9%	2.61	375
SAVE	21.01	56.48	168.8%	20.36	1,522
nus	37.78	83.52	121.1%	40.15	2,246
CPLA	32.22	66.48	106.3%	28.49	401
QCOR	30.16	60.75	101.4%	26.80	1,806
PBI	12.76	25.45	99.5%	12.98	2,662
NOC	63.82	121.03	89.6%	64.20	15,781
BAH	11.28	21.03	86.4%	12.51	1,780
HLF	35.77	66.60	86.2%	34.72	3,933
RTN	53.11	97.91	84.4%	53.76	17,856
APOL	18.58	33.33	79.4%	15.98	2,091
STX	30.70	52.19	70.0%	31.55	11,383
ESI	18.63	31.03	66.6%	11.95	435
WCRX	13.78	22.93	66.4%	10.85	3,462
STRZA	19.28	31.98	65.9%	18.77	2,452
AGX	17.34	28.59	64.9%	13.90	250
BLC	8.54	13.74	60.9%	7.37	898
SAI	10.46	16.49	57.7%	N/A	3,902
CACI	50.68	78.83	55.5%	50.35	1,163
GME	24.07	37.31	55.0%	23.36	3,001
POZN	5.15	7.96	54.6%	4.26	190
LPS	24.84	37.30	50.2%	21.23	2,137
MYGN	25.01	36.21	44.8%	20.02	2,033
MSFT	26.97	38.31	42.0%	27.64	232,462
CA	23.77	33.50	40.9%	24.01	11,071
ATVI	14.32	19.35	35.1%	13.27	16,121
AFAM	20.82	27.42	31.7%	17.66	194
VCI	25.82	34.00	31.7%	23.69	1,056
PDLI	6.53	8.57	31.2%	6.83	1,333
USMO	11.24	14.45	28.6%	11.10	253
DMRC	23.02	29.38	27.6%	17.85	160
RPXC	12.65	16.02	26.6%	11.78	658
CF	198.89	250.90	26.2%	169.33	12,676
AAPL	439.69	526.24	19.7%	385.10	423,298
EBIX	13.77	16.25	18.0%	8.21	514
NATR	12.96	15.11	16.6%	13.30	227
CSCO	20.28	21.80	7.5%	19.98	111,251
COH	45.67	48.81	6.9%	44.31	13,131
NSU	3.66	3.87	5.7%	2.65	763
MSB	21.47	22.22	3.5%	17.07	305
DELL	13.68	13.86	1.3%	N/A	24,193
SVLC	2.34	2.32	-0.9%	1.13	210
GTIV	10.99	10.71	-2.5%	8.47	338
NTI	25.67	24.18	-5.8%	17.83	525
STRA	52.25	47.77	-8.6%	33.51	595
HFC	51.98	45.57	-12.3%	38.98	11,297
TNAV	7.38	6.01	-18.6%	4.91	303
EGY	8.26	6.66	-19.4%	5.03	478
INTX	9.76	6.13	-37.2%	5.62	191
BODY	7.83	3.12	-60.2%	2.92	128

Hey check out who was #1!!!! That was even higher than my initial purchase price ($2.73). For profit Education Stocks were again NOT a drag.  The 4 of them were up on average by a whopping 61%. And there were five stocks up 100% or more (including GTAT).  I do think things are continuing to change.  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	48.3%	28.9%
11/23/2012	45.7%	32.1%
12/31/2012	52.3%	33.0%
1/25/2013	39.5%	22.0%
2/22/2013	46.5%	26.4%
3/28/2013	42.6%	21.6%
4/26/2013	33.7%	20.9%
5/24/2013	21.5%	15.9%
6/28/2013	23.1%	17.9%
7/29/2013	16.1%	12.6%
8/30/2013	13.3%	15.7%
9/27/2013	10.5%	11.0%
10/25/2013	4.5%	6.6%
11/29/2013	1.2%	4.2%
12/31/2013	0.1%	1.4%
1/31/2014	3.9%	4.7%

As noted, this is the ninth straight portfolio to win after 29 straight losses! (that is hard to do... it ain't random).  It may be a bad omen that the 6 newest portfolios are all trailing.  Still some time to go.

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 46.7%.  The new portfolio was solid okay, up 32.6%.  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	172,213
Total New	176,409
Total Dividend	376,078
Total Russell 3K	173,509

You can see that the dividend approach is doing well.  But overall, MFI is starting to lag just the R3K again.  I have written some blogs on what has caused that (Why Has MFI Performed Poorly?).  Onward! Time to create the new portfolio.