March 28th 2013 Monthly Tracking Portfolio

March 28th, 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 10! It went up an excellent 40.1 %,stomping the R3K, which was up a less excellent 21.2%! 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	3.30	17.17	420%	3.03	394
ENDP	30.76	66.86	117%	30.39	3,408
AGX	14.39	29.22	103%	13.90	208
ESI	13.78	27.36	99%	11.95	321
CPLA	30.80	60.42	96%	28.49	386
QCOR	31.76	62.12	96%	26.80	1,905
nus	43.52	83.06	91%	43.00	2,581
APOL	17.38	32.85	89%	16.54	1,957
BAH	11.78	21.77	85%	12.66	1,858
NOC	68.43	121.81	78%	69.13	16,781
RTN	57.35	98.65	72%	55.85	19,283
XLS	10.66	18.32	72%	10.19	2,051
WCRX	13.38	22.93	71%	10.85	3,394
STX	35.25	54.92	56%	33.22	13,069
AUXL	17.29	26.51	53%	13.87	852
USNA	48.33	74.02	53%	45.88	668
HLF	36.69	55.65	52%	34.72	4,003
GME	27.20	40.62	49%	27.93	3,306
VG	2.89	4.28	48%	2.65	622
LPS	25.23	37.30	48%	0.02	2,162
DMRC	21.57	31.54	46%	17.85	157
MSFT	27.79	40.30	45%	28.11	239,538
NVDA	12.58	17.90	42%	12.04	7,913
ATVI	14.43	20.45	42%	13.27	16,196
LO	38.43	53.35	39%	40.02	15,414
MYGN	25.41	32.87	29%	20.02	2,066
CA	24.37	30.84	27%	24.01	11,350
UIS	22.75	28.73	26%	15.68	999
DLX	40.46	50.81	26%	33.37	2,095
AAPL	431.74	536.86	24%	385.10	415,646
VCI	28.81	34.00	18%	23.69	1,158
PDLI	6.81	7.99	17%	7.22	1,021
SAI	12.42	13.89	12%	N/A	4,634
CSCO	20.28	22.33	10%	19.98	111,224
EGY	7.59	8.28	9%	5.03	439
SPPI	7.46	7.77	4%	6.95	448
EBIX	16.14	16.67	3%	8.21	602
NATR	13.60	13.92	2%	13.33	241
DELL	14.16	13.86	-2%	N/A	24,906
MSB	21.01	19.91	-5%	17.07	299
NSU	3.62	3.43	-5%	2.65	762
STRA	48.38	45.83	-5%	33.51	551
TNAV	6.45	5.92	-8%	4.91	265
EXPR	17.81	15.99	-10%	15.42	1,513
GTIV	10.82	9.05	-16%	8.45	333
INTX	8.55	5.90	-31%	5.56	169
IDCC	47.31	32.52	-31%	26.25	1,965
BTH	17.15	10.60	-38%	8.62	288
LFVN	2.35	1.32	-44%	1.10	267
GNI	60.69	19.30	-68%	18.76	112

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 70%. And there were seven stocks up 90% 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:

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	40.1%	21.2%
4/26/2013	36.3%	20.5%
5/24/2013	18.9%	15.4%
6/28/2013	21.1%	17.5%
7/29/2013	13.9%	12.1%
8/30/2013	12.1%	15.3%
9/27/2013	10.8%	10.6%
10/25/2013	5.4%	6.2%
11/29/2013	1.8%	3.8%
12/31/2013	0.9%	1.0%
1/31/2014	4.9%	4.3%
2/28/2014	1.4%	-0.4%

As noted, this is the tenthstraight portfolio to win after 29 straight losses! (that is hard to do... it ain't random).  It may be a bad omen that the 4 of the 7 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 34.3%.  The new portfolio was solid as well, up 30.7%.  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	171,750
Total New	180,638
Total Dividend	378,217
Total Russell 3K	172,853

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.