Wednesday, December 31, 2014

December 31st, 2013 Monthly Tracking Portfolio

Monthly Tracking Portfolio

Another month year 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.

Onward

 Fearless readers will recall we had a 29 month "losing streak"..  Then we had a 13 month winning streak.  I am pleased to report that that we ended a four month losing streak.  It was close, up 12.7% versus 11.9% for R3K. Here are the 50 stocks in descending performance order:

Stock  Initial Price   End Price  Percent Change  52 week low   Mkt Cap 
STRA              34.47           74.28 115.5%                33.51           381
IQNT              11.07           19.63 77.3%                 9.80           366
QCOR              53.77           93.60 74.1%                47.71         3,294
MYGN              20.98           34.06 62.3%                20.50         1,789
BAH              16.97           26.53 56.3%                17.20         2,721
SAIC              32.17           49.53 54.0%                32.50         1,589
GTIV              12.41           19.05 53.5%                 7.35           392
VGR              14.48           21.31 47.2%                15.36         1,558
PRSC              25.72           36.44 41.7%                23.91           343
AAPL              78.49         110.38 40.6%                70.51     498,632
CHE              75.95         105.67 39.1%                72.50         1,356
DHX                7.25           10.01 38.1%                 6.50           418
USNA              75.58         102.59 35.7%                55.01         1,083
RAI              47.78           64.27 34.5%                46.55       26,932
MO              36.64           49.27 34.5%                33.80       76,731
NOC            112.18         147.39 31.4%              109.17       25,495
LO              48.55           62.94 29.6%                46.48       18,697
EGL              33.40           42.80 28.1%                30.22           578
CSCO              21.74           27.82 27.9%                21.27     119,661
MSFT              36.41           46.45 27.6%                34.63     311,222
APOL              27.32           34.11 24.9%                23.30         3,083
AGX              26.97           33.64 24.7%                26.09           384
SPOK              14.04           17.36 23.6%                12.93           316
DLX              51.10           62.25 21.8%                44.64         2,625
RTN              89.03         108.17 21.5%                87.64       28,890
EBIX              14.43           16.99 17.7%                12.12           566
CACI              73.22           86.18 17.7%                67.01         1,708
CRUS              20.43           23.57 15.4%                16.80         1,304
ATVI              17.66           20.15 14.1%                16.55       12,282
BKE              49.14           52.52 6.9%                41.45         2,546
UNTD              13.76           14.55 5.7%                 9.20           182
CRTX                9.49             9.48 -0.1%                 7.77           252
LPS              37.38           37.30 -0.2%                 N/A          3,192
VCI              34.25           34.00 -0.7%                 N/A          1,319
PDLI                7.89             7.71 -2.3%                 7.22         1,436
NATR              15.21           14.82 -2.6%                12.91           281
CA              32.54           30.45 -6.4%                25.25       15,034
PETS              15.80           14.37 -9.1%                12.07           333
UIS              33.57           29.48 -12.2%                18.72         1,475
RPXC              16.90           13.78 -18.5%                12.71           923
WTW              32.93           24.84 -24.6%                19.09         1,874
GME              47.68           33.80 -29.1%                31.81         5,725
SWHC              13.49             9.47 -29.8%                 9.03           753
COH              54.24           37.56 -30.8%                32.72       15,813
PFMT              10.30             6.65 -35.4%                 5.95           506
RGR              71.03           34.63 -51.2%                33.60         1,397
HLF              78.35           37.70 -51.9%                35.45         7,893
LQDT              22.66             8.17 -63.9%                 7.41           694
GNI              43.87           13.90 -68.3%                15.04           105
ESI              33.58             9.61 -71.4%                 3.66           778


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.

STRA was number one.  Ironically, another for profit education stock, ESI was #50.

Here is a listing of every portfolio I have tracked:

Date MFI R3K Lead
1/6/2006 16.0% 10.9% 1
2/17/2006 21.2% 14.6% 1
3/29/2006 13.0% 9.6% 1
4/7/2006 10.3% 12.1% 0
5/12/2006 20.4% 18.6% 1
5/31/2006 29.2% 23.3% 1
6/30/2006 22.4% 20.0% 1
7/31/2006 19.7% 17.3% 1
8/31/2006 13.0% 13.3% 0
9/28/2006 12.7% 14.6% 0
10/27/2006 10.3% 12.0% 0
11/29/2006 -0.3% 4.8% 0
12/28/2006 -6.9% 3.4% 0
1/26/2007 -10.2% -6.6% 0
2/27/2007 -3.7% -1.0% 0
3/26/2007 -9.8% -5.5% 0
4/27/2007 -10.9% -5.0% 0
5/29/2007 -11.5% -6.3% 0
7/3/2007 -30.0% -15.6% 0
7/30/2007 -19.9% -11.5% 0
8/30/2007 -12.5% -8.7% 0
9/27/2007 -19.0% -18.2% 0
11/2/2007 -40.4% -34.3% 0
11/28/2007 -40.1% -38.3% 0
12/28/2007 -36.3% -40.0% 1
1/25/2008 -36.4% -35.9% 0
2/26/2008 -51.7% -41.5% 0
3/24/2008 -40.9% -36.8% 0
4/25/2008 -25.6% -31.0% 1
5/28/2008 -22.2% -33.6% 1
7/2/2008 -11.7% -25.3% 1
7/29/2008 -10.5% -20.9% 1
8/29/2008 -13.8% -17.9% 1
9/26/2008 -4.3% -10.0% 1
10/31/2008 18.7% 13.9% 1
11/26/2008 50.9% 27.7% 1
12/26/2008 48.9% 32.3% 1
1/23/2009 59.3% 36.4% 1
2/27/2009 92.8% 55.6% 1
3/27/2009 85.8% 48.1% 1
4/24/2009 69.7% 45.8% 1
5/29/2009 31.8% 22.8% 1
6/29/2009 21.3% 24.0% 0
7/29/2009 19.5% 15.9% 1
8/28/2009 7.4% 8.8% 0
9/25/2009 12.6% 12.4% 1
10/30/2009 22.7% 18.3% 1
11/27/2009 24.3% 13.6% 1
12/31/2009 23.7% 18.1% 1
1/22/2010 19.0% 20.6% 0
2/26/2010 18.6% 23.6% 0
3/25/2010 10.0% 15.4% 0
4/23/2010 7.1% 11.4% 0
5/28/2010 19.3% 25.4% 0
6/29/2010 16.7% 25.7% 0
7/29/2010 5.4% 20.1% 0
9/2/2010 7.3% 10.1% 0
9/24/2010 -4.3% 0.3% 0
10/29/2010 -2.9% 10.4% 0
11/26/2010 -8.5% 1.4% 0
1/3/2011 -11.4% 0.1% 0
1/28/2011 -7.6% 4.9% 0
2/25/2011 -5.5% 5.0% 0
3/24/2011 -4.4% 7.4% 0
4/21/2011 -16.0% 3.2% 0
5/27/2011 -12.0% -0.4% 0
6/24/2011 -9.5% 5.0% 0
7/29/2011 -4.3% 8.1% 0
8/26/2011 12.0% 21.6% 0
9/30/2011 23.5% 29.6% 0
10/28/2011 0.4% 11.5% 0
11/25/2011 13.9% 24.0% 0
12/29/2011 9.9% 15.9% 0
1/27/2012 7.4% 16.6% 0
2/24/2012 7.8% 13.3% 0
3/23/2012 9.1% 15.2% 0
4/27/2012 10.5% 15.3% 0
5/25/2012 26.5% 27.5% 0
6/22/2012 26.1% 24.6% 1
7/27/2012 30.4% 25.7% 1
8/24/2012 26.0% 19.8% 1
9/28/2012 39.3% 22.1% 1
10/26/2012 48.3% 28.9% 1
11/23/2012 45.7% 32.1% 1
12/31/2012 52.3% 33.0% 1
1/25/2013 39.5% 22.0% 1
2/22/2013 46.5% 26.4% 1
3/28/2013 40.1% 21.2% 1
4/26/2013 35.0% 20.5% 1
5/24/2013 20.4% 19.2% 1
6/28/2013 26.9% 24.1% 1
7/29/2013 17.8% 19.0% 0
8/30/2013 17.5% 24.6% 0
9/27/2013 12.9% 17.7% 0
10/25/2013 11.8% 15.4% 0
11/29/2013 12.3% 15.6% 0
12/31/2013 12.7% 11.9% 1
1/31/2014 16.0% 15.6% 1
2/28/2014 10.9% 10.4% 1
3/28/2014 4.3% 10.8% 0
4/25/2014 3.1% 10.7% 0
5/30/2014 5.7% 7.3% 0
6/27/2014 1.7% 4.8% 0
7/25/2014 4.2% 4.3% 0
8/29/2014 3.7% 2.5% 1
9/26/2014 11.4% 4.1% 1
10/31/2014 5.0% 2.0% 1
11/28/2014 1.8% -0.5% 1
Average 10.0% 9.3% 0


As noted, we recently ended a 5 month losing streak.  There is some improvement as now 6 of the 11 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 average (relatively), up about 14.5%.  The new portfolio was solid, up 47.8% - as SAIC & PRSC were both terrific. 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 today if you had spread $100,000 over the first twelve portfolios evenly.

Category Value
Total     186,577
Total Russell 3K     191,549
New     190,631
Dividend     430,270