April 26th 2013 Monthly Tracking Portfolio

April 26th 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 11! It went up an excellent 35.0 %,stomping the R3K, which was up a less excellent 20.5%! Here are the 50 stocks in descending performance order:

Stock	Initial Price	End Price	Percent Change	52 week low	Mkt Cap
GTAT	3.66	16.09	340%	3.44	439
QCOR	28.73	81.50	184%	29.00	1,715
BAH	12.73	22.82	79%	14.57	2,008
XLS	10.47	18.48	77%	10.75	2,007
WCRX	13.58	22.93	69%	10.85	3,450
AUXL	16.03	26.88	68%	13.87	793
NOC	72.42	118.99	64%	74.04	17,492
RTN	58.56	94.90	62%	59.77	19,415
SWHC	8.71	14.03	61%	8.53	566
AGX	16.98	27.17	60%	14.94	246
DMRC	20.98	32.95	57%	17.85	153
CPLA	35.60	55.72	57%	34.94	447
APOL	17.93	27.84	55%	16.89	2,018
HLF	37.49	57.83	54%	38.24	4,047
ESI	17.74	27.06	53%	17.30	421
STX	35.10	52.72	50%	35.86	13,053
NVDA	13.14	18.73	43%	13.11	8,271
USNA	55.88	78.88	41%	54.67	762
AAPL	406.91	571.94	41%	388.87	387,864
LPS	26.70	37.30	40%	N/A	2,246
VCI	24.64	34.00	38%	N/A	961
FLR	55.83	75.73	36%	55.63	9,133
UIS	18.57	25.03	35%	18.11	792
LO	40.79	54.12	33%	41.56	16,167
ATVI	14.68	19.46	33%	13.27	16,402
EGY	6.61	8.76	33%	5.03	378
USMO	12.75	16.89	32%	12.58	276
CF	183.33	240.69	31%	169.33	11,711
MSFT	30.88	39.91	29%	30.84	263,703
RPXC	13.16	16.62	26%	13.15	698
TVL	12.05	14.90	24%	N/A	648
VG	3.03	3.67	21%	2.65	649
GME	33.66	39.37	17%	30.94	4,110
PDLI	7.18	8.39	17%	7.38	1,071
TNAV	5.43	6.34	17%	4.91	225
CSCO	20.05	23.00	15%	20.22	109,718
NATR	12.76	13.62	7%	12.91	229
PETS	12.24	12.90	5%	12.13	255
DELL	13.19	13.86	5%	N/A	23,185
MSB	19.45	20.30	4%	17.07	270
NSU	3.49	3.61	3%	2.65	742
SPPI	7.45	6.77	-9%	6.36	445
STRA	48.00	43.08	-10%	33.51	536
IDCC	42.05	34.43	-18%	26.25	1,769
EXPR	17.85	14.28	-20%	14.22	1,498
GTIV	10.07	7.89	-22%	7.43	308
INTX	8.69	5.68	-35%	5.16	173
LFVN	2.27	1.41	-38%	1.10	258
BTH	16.74	9.55	-43%	8.62	279
GNI	55.93	17.41	-69%	16.80	102

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 respectable 39%.  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	40.1%	21.2%
4/26/2013	35.0%	20.5%
5/24/2013	17.0%	15.5%
6/28/2013	19.9%	17.5%
7/29/2013	11.4%	12.2%
8/30/2013	10.6%	15.3%
9/27/2013	9.0%	10.6%
10/25/2013	3.3%	6.2%
11/29/2013	0.7%	3.9%
12/31/2013	1.3%	1.0%
1/31/2014	5.5%	4.4%
2/28/2014	1.6%	-0.3%
3/28/2014	-0.5%	0.0%

As noted, this is the eleventh 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 of the 9 newest portfolios are all trailing (was 4 of 7 last month).  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	170,261
Total Russell 3K	172,915
New	182,558
Dividend	378,733

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.