Friday, May 22, 2015

Settling In For Long Weekend

Long Weekend

Came home right after lunch.  Looks like we're just staying put this weekend.  Maybe BBQ on the deck.  Son is playing in the band for the local Memorial Day parade. Perfect top 10 of the year kind of day, seventy degrees, sunny with a light breeze.

BRCD Does Well

BRCD announced what I thought were decent earnings last night (Brocade Announces Second Fiscal Quarter 2015 Results). They bumped the divvy by a penny (or 29% if you want it to sound like a lot).  Yet the stock traded down after hours:

Brocade Communications (BRCD) Stock Falls in After-Hours Trading on Revenue Miss

This is a great example of how foolish short term traders can be.  Today they are up 6% as it was a solid quarter:

Brocade Communications (BRCD) Stock Gains on Earnings Beat

So there are times it is best to simply sit on your hands and step away from the batter.

Discretionary Buys

Last weekend I mentioned I had bought three stocks on Thursday and Friday as short term discretionary buys.  Two were Seth Klarman buys, ATRA and KLXI.  the third was BSQR, a microcap that had strong earnings and a good growth profile + good balance sheet.  I sold all three early in the week for nice gains (2 to 3%).  I like all three companies and will keep an eye on them.

MFI Index

While my MFI portfolios have been rock solid (Select is up 15.8% and Formula is up 7.4% - keep in mind select was 50% in cash until 3/31 and is still 25% cash), the MFI Index is struggling a bit.  It is up 3.6%, trailing the R3K by about a point. And my 12 open tracking portfolios in aggregate are trailing by about 2 points.  No slam dunks in this game.  The May 30th portfolio has one more week to run, but it is trailing by about 6 points.

August Tranche

My August MFI tranche has made a great run and now is leading the R3K as we head down the stretch (2+ months left).  BRCD is the big winner, up over 36%. Hard to believe a year ago they were trading for $9.34 as they still seem reasonably cheap.  This just shows the value of a screen and how the market "simply goes nuts" from time to time.  When a stock is trading down or is cheap, it is very easy to think, it is cheap for a reason - warning, warning.  And that will at times be right.  But there will also be times when the market has priced it way too low. And you can make a lot on the ride up.  Looking back,can you believe NHTC was under $12  in January?  And there are deals to be had today.  Sometimes you just have to hold your nose. And you will take some hits. Just remember it is about the portfolio.

8/15/2014 Start Current Dividend Pct Gain R3K Gain
CSCO $24.40 $29.36 $0.59 22.7% 10.5%
AGX $36.71 $35.72 $0.70 -0.8% 10.5%
ITRN $21.32 $24.39 $0.71 17.7% 10.5%
BRCD $9.34 $12.66 $0.11 36.7% 10.5%
CBI $58.25 $56.56 $0.14 -2.7% 10.5%
Totals 14.8% 10.5%

Oh, ITRN also had good earnings!

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