Monthly Tracking Portfolio - 3/28/14

Monthly Tracking Portfolio Update

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.

Onward

 Fearless readers will recall we had a 29 month "losing streak"..  Then we had a 13 month winning streak. This month, our mini three month winning streak was snapped.  Too many bad stocks (WTW, ESI, APOL, PFMT etc). Here are the 50 stocks in descending performance order:

Stock	Initial Price	End Price	Percent Change	52 week low	Mkt Cap
EBIX	16.39	30.16	84.0%	12.12	636
KRFT	53.25	89.10	67.3%	53.33	33,173
AAPL	75.27	123.25	63.7%	73.05	477,388
QCOR	61.68	93.60	51.8%	58.89	3,747
USNA	74.02	111.38	50.5%	63.22	1,025
BAH	20.39	29.20	43.2%	20.65	3,151
MO	35.54	50.34	41.6%	37.13	73,699
RAI	50.84	70.60	38.9%	53.04	28,479
CHE	88.07	120.67	37.0%	80.94	1,558
NOC	119.34	160.48	34.5%	116.11	26,508
DLX	49.79	66.93	34.4%	48.42	2,555
LO	51.26	68.19	33.0%	51.84	19,429
STRA	45.83	59.93	30.8%	41.52	492
PENN	11.95	15.53	30.0%	10.07	1,043
PETS	12.48	16.18	29.6%	12.07	262
DNB	97.90	126.53	29.2%	98.01	3,751
CTSH	49.69	63.00	26.8%	41.51	15,074
CSCO	21.66	27.13	25.3%	22.30	115,500
NDZ	10.41	13.00	24.9%	N/A	644
DHX	7.18	8.82	22.8%	6.73	391
AGX	28.59	34.68	21.3%	26.09	417
IQNT	13.50	15.96	18.2%	10.06	445
TTWO	21.48	25.26	17.6%	18.45	2,168
BKE	42.54	49.35	16.0%	41.96	2,202
ATVI	20.24	22.76	12.5%	17.73	14,317
MYGN	32.87	35.76	8.8%	31.56	2,717
CA	29.82	32.29	8.3%	25.25	13,667
NATR	12.30	13.07	6.3%	11.88	225
MSFT	39.24	40.97	4.4%	38.51	333,494
EGL	44.39	43.37	-2.3%	30.22	765
GME	39.30	38.36	-2.4%	31.69	4,590
BWC	32.10	31.26	-2.6%	26.58	3,585
PDLI	7.44	7.04	-5.4%	6.52	1,354
SWHC	14.33	13.15	-8.2%	9.03	783
RPXC	16.16	14.22	-12.0%	11.94	874
COH	47.96	41.31	-13.9%	32.72	13,786
KING	18.08	15.53	-14.1%	10.68	5,535
RGR	58.51	50.23	-14.2%	33.60	1,160
UIS	28.73	23.00	-19.9%	18.72	1,269
HLF	55.65	43.17	-22.4%	27.60	5,623
BCOR	19.11	14.00	-26.7%	12.61	797
NSR	33.23	24.15	-27.3%	20.32	2,151
NUS	80.75	58.65	-27.4%	38.12	4,829
SPRT	2.49	1.60	-35.7%	1.57	142
APOL	32.85	19.20	-41.6%	19.09	3,691
LQDT	26.09	9.80	-62.4%	7.32	837
PFMT	9.21	3.34	-63.7%	3.28	439
WTW	20.65	7.39	-64.2%	6.83	1,162
PTIE	5.60	1.82	-67.5%	1.61	254
ESI	27.36	6.79	-75.2%	3.66	638

A late run by Kraft tried to save the day. But we ended up just 6.1% versus 12.3% for the index. A thorough stomp.

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.

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	14.2%	13.0%	1
2/28/2014	15.4%	13.9%	1
3/28/2014	6.1%	12.3%	0
4/25/2014	5.5%	12.2%	0
5/30/2014	6.4%	8.7%	0
6/27/2014	0.9%	6.2%	0
7/25/2014	3.9%	5.7%	0
8/29/2014	2.6%	3.9%	0
9/26/2014	9.4%	5.5%	1
10/31/2014	7.5%	3.3%	1
11/28/2014	2.3%	0.8%	1
12/31/2014	0.6%	0.9%	0
1/30/2015	3.0%	3.7%	0
2/27/2015	-2.8%	-1.8%	0
Average	9.8%	9.2%	0

Subsets

I also have tracked 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.  I am going to try to add a third one , which I call "dogs".  It is like the dogs of the Dow in that you take the worst five performing stocks from the prior year that renew or all those that dropped more that 29%. The dividend portfolio was solid, up about 22.2%.  The new portfolio was just ok, up 9.5%. 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	187,963
Total Russell 3K	193,986
New	198,022
Dogs	280,551
Dividend	395,968

Current Dogs

Here are the five dogs going forward. It would take some courage to buy these names.

Stock	Initial Price	Mkt Cap
UIS	23.00	1,143
RPXC	14.22	801
PFMT	3.34	165
NSR	24.15	1,330
LQDT	9.80	294
BCOR	14.00	572

Actually - I just noticed RPXC is an error, should be KING. I have fixed in my spreadsheet.