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 13 ! It went up an excellent 26.9 %,edging the R3K, which was up a less excellent 19.2%! Here are the 50 stocks in descending performance order:
| Stock | Initial Price | End Price | Percent Change | 52 week low | Mkt Cap |
| AGX | 15.05 | 36.88 | 145.0% | 14.94 | 218 |
| QCOR | 44.43 | 91.27 | 105.4% | 45.39 | 2,706 |
| 14.20 | 27.97 | 97.0% | 13.76 | 2,958 | |
| 17.72 | 31.06 | 75.3% | 17.45 | 1,998 | |
| 33.89 | 57.82 | 70.6% | 34.67 | 1,757 | |
| 55.31 | 91.98 | 66.3% | 57.32 | 372,776 | |
| 9.17 | 14.24 | 55.3% | 8.31 | 344 | |
| 14.12 | 21.92 | 55.2% | 14.14 | 15,927 | |
| 9.96 | 15.23 | 52.9% | 7.35 | 311 | |
| 80.91 | 120.67 | 49.1% | 81.74 | 19,467 | |
| LO | 41.70 | 61.50 | 47.5% | 41.56 | 16,511 |
| 64.32 | 94.40 | 46.8% | 64.48 | 21,423 | |
| HLF | 44.52 | 65.14 | 46.3% | 44.85 | 4,649 |
| SWHC | 9.98 | 14.39 | 44.2% | 9.89 | 664 |
| CF | 168.94 | 240.27 | 42.2% | 169.33 | 10,389 |
| 24.11 | 34.00 | 41.0% | N/A | 956 | |
| BAH | 15.25 | 20.93 | 37.2% | 16.61 | 2,411 |
| 65.82 | 89.45 | 35.9% | 66.01 | 3,307 | |
| CPLA | 40.93 | 55.06 | 34.5% | 41.55 | 516 |
| 7.21 | 9.66 | 34.0% | 7.38 | 1,079 | |
| VG | 2.83 | 3.76 | 32.9% | 2.73 | 604 |
| 17.36 | 22.94 | 32.1% | 16.81 | 1,099 | |
| 58.72 | 76.88 | 30.9% | 57.50 | 9,659 | |
| 43.64 | 56.92 | 30.4% | 37.17 | 16,062 | |
| NSU | 2.83 | 3.69 | 30.2% | 2.80 | 587 |
| CHE | 71.70 | 93.03 | 29.7% | 64.16 | 1,360 |
| AUXL | 16.63 | 21.26 | 27.8% | 16.36 | 820 |
| 46.36 | 58.83 | 26.9% | 46.69 | 928 | |
| 33.55 | 42.25 | 25.9% | 30.84 | 288,416 | |
| 16.58 | 19.69 | 18.8% | 17.25 | 235 | |
| 34.20 | 40.54 | 18.5% | 32.70 | 54,373 | |
| 14.58 | 16.97 | 16.4% | 12.91 | 260 | |
| LPS | 32.16 | 37.30 | 16.0% | N/A | 2,747 |
| SAI | 13.81 | 15.91 | 15.2% | N/A | 4,764 |
| USMO | 13.12 | 15.03 | 14.6% | 12.58 | 295 |
| 22.07 | 24.71 | 12.0% | 21.97 | 973 | |
| TNAV | 5.23 | 5.76 | 10.1% | 5.18 | 207 |
| 48.83 | 52.64 | 7.8% | 33.51 | 528 | |
| 72.38 | 77.76 | 7.4% | 55.01 | 972 | |
| 7.46 | 8.01 | 7.4% | 6.36 | 448 | |
| 44.13 | 47.31 | 7.2% | 26.25 | 1,837 | |
| 23.61 | 24.70 | 4.6% | 20.22 | 129,341 | |
| 13.25 | 13.86 | 4.6% | N/A | 23,385 | |
| RPXC | 16.80 | 17.47 | 4.0% | 14.55 | 899 |
| 24.40 | 16.62 | -31.9% | 16.20 | 570 | |
| DXM | 17.57 | 11.35 | -35.4% | 4.30 | 179 |
| LFVN | 2.32 | 1.35 | -41.8% | 1.10 | 263 |
| INTX | 8.13 | 4.71 | -42.1% | 4.15 | 157 |
| 45.79 | 20.54 | -55.1% | 19.50 | 2,587 | |
| GNI | 51.43 | 20.32 | -60.5% | 16.80 | 103 |
I did find another site that has been tracking since 2006 this week. It uses a different approach, just 5 stocks picked randomly every quarter. They have had better results than me (TrackJGreenblatt's Stock Picks). I found it very interesting and would encourage people to take a looksee.
AGX was number one, I am glad to report I have gotten to ride that wave personally. QCOR was number two. One of my worst sales ever as I once bought them around $18 and sold at $22, happy with a quick 20% gain. For profit Education Stocks were a minor drag. The 4 of them were up on average by a sub-par 21.4%. ESI, really took a nose dive recently.
Here is a listing of every portfolio I have tracked:
| Average of Percent Change | ||
| Date | Total | IWV |
| 16.0% | 10.9% | |
| 21.2% | 14.6% | |
| 13.0% | 9.6% | |
| 10.3% | 12.1% | |
| 20.4% | 18.6% | |
| 29.2% | 23.3% | |
| 22.4% | 20.0% | |
| 19.7% | 17.3% | |
| 13.0% | 13.3% | |
| 12.7% | 14.6% | |
| 10.3% | 12.0% | |
| -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% |
| 35.0% | 20.5% | |
| 20.4% | 19.2% | |
| 26.9% | 24.1% | |
| 18.0% | 18.5% | |
| 16.6% | 21.8% | |
| 14.1% | 16.9% | |
| 8.8% | 12.2% | |
| 5.5% | 9.7% | |
| 6.0% | 6.7% | |
| 10.4% | 10.2% | |
| 6.8% | 5.3% | |
| 2.9% | 5.7% | |
| 2.2% | 5.6% | |
| 2.2% | 2.3% | |
| Grand Total | 10.0% |
As noted, this is the thirteenth (unlucky?) 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 9 of the 11 newest portfolios are all trailing (including July 2013). 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 solid, up about 34%. The new portfolio also was strong, up 34% as well - as UTHR and CRUS were both goodd. 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 | 178,287 |
| Total Russell 3K | 182,653 |
| New | 186,483 |
| Dividend | 400,179 |
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.
Posts
6 comments:
Marsh,
Did this quick so there could be an error. The June 28th 2013 has 26 large caps over 1 billion making 37.3% and 10 dividends 2.6 or greater making 44.3% vs IWV at 24.1%. The 24 small ones did 15.7%.
Can this be REAL?
The dividend subset is pretty interesting. It might be serving as a proxy for quality or the like by filtering out some of the frauds and really junky stocks, eh?
CorpRaider
John - if you look at the last 12 closed tracking portfolios, stocks with market caps 1B or greater have gone up by 51.2% on average. Under $1b have lagged at +25.1%. That is obviously a stark difference. I have commented several times here how since the beginning stocks about $800m or great have been more stable and have performed better.
Corpraider, there is likely a large overlap between these stocks $1b and greater and stocks paying a dividend of 2.6% or more.
Marsh - isn't GME one of the stocks from the June 8th 2013 portfolio? I didn't see it on your post...
Brian, GME was not on the list that month. It is possible they were in the midst of changing quarterly data - sometimes stocks fall off list a few days when that happens.
Marsh, I double checked and it looks like there might be a discrepancy with the data. AGX, MSB, NATR, USMO, TNAV, DXM, LFVN, INTX, and GNI appear NOT to be in the June 28th, 2013 portfolio but are listed on your post as being in that portfolio. I'm going off of the Top 200 Lists excel doc...
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