Saturday, July 11, 2015

Lazy Summer Weekend Update

Lazy Summer Weekend Update

Nothing to do, nowhere to go this weekend.  Going to be a little warm (around 90) but hey, it is mid-July. Have a little Count Basie on (Live at Newport, stellar album) and working on a French Roast. Life is pretty good.

The week was pretty volatile, but ended down a bit, but up 11.7% still on the year ==> strong. I did buy a few trading positions.


  1. I bought a second tranche of UCO at 35.49 this has not been a great trade for me but I am going to try and make it work.
  2. I bought BITI at 19.70.  This is a bio tech company working on Alzheimer's.  Seth Klarman bought a truckload at about the same price and it has generally worked well for me to align with him on those names.
  3. I bought AXS at $55.79.  They are in a three-way love triangle trying to acquire PRE. This is essentially a bet they lose.  In doing so, I think shareholders win as they get a substantial break-up fee and I think they are then in play to be acquired (with the recent Ace Chubb merger (Ace to Buy Chubb for $28.3 Billion) this space is ripe).

MFI Select

While NHTC tends to drive this portfolio (it has become out-sized and it volatile), everything else was pretty solid.  I had great news on DEPO, which received a take-out offer from HZNP (Horizon Pharma Goes Hostile In Depomed Bid).  That caused the stock to rocket up 44% on the week.  I will also be watching PSDV with interest this week.  The results of a Phase II study (pSivida Announces Top-Line Results from Investigator-Sponsored Phase II Study of Medidur™ for Uveitis to Be Reported Next Week) will be announced next week.  The stock traded up 16% Thursday/Friday on 3x volume.  Not sure if speculators or if someone knows something.

So my May tranche, which stumbled badly out of the gate, is starting to claw back into the race.  Of course my August tranche has given up most of their lead.  It will be very tight between now and August 15th to see if they win. CBI has been all over the place.  But if they stay around $45, I will buy them back for new tranche.


8/15/2014 Start Current Dividend Pct Gain R3K Gain
CSCO $24.40 $27.28 $0.80 15.1% 8.3%
AGX $36.71 $39.97 $0.70 10.8% 8.3%
ITRN $21.32 $24.90 $0.87 20.9% 8.3%
BRCD $9.34 $11.32 $0.15 22.9% 8.3%
CBI $58.25 $46.45 $0.21 -19.9% 8.3%
Totals 9.9% 8.3%
11/15/2014 Start Current Dividend Pct Gain R3K Gain
FLR $64.80 $50.74 $0.63 -20.7% 3.8%
IPCM $38.45 $55.41 $0.00 44.1% 3.8%
VIAB $72.29 $61.80 $1.06 -13.0% 3.8%
NHTC $12.19 $37.57 $0.06 208.7% 3.8%
AWRE $4.40 $4.00 $0.00 -9.1% 3.8%
Totals 42.0% 3.8%
2/1/2015 Start Current Dividend Pct Gain R3K Gain
VEC $28.00 $24.13 $0.00 -13.8% 5.3%
QCOM $62.73 $62.73 $0.90 1.4% 5.3%
VIAB $63.91 $61.80 $0.73 -2.2% 5.3%
UIS $22.03 $20.02 $0.00 -9.1% 5.3%
NHTC $12.44 $37.57 $0.05 202.4% 5.3%
Totals 35.7% 5.3%
5/6/2015 Start Current Dividend Pct Gain R3K Gain
CBI $50.38 $46.45 $0.07 -7.7% 0.1%
PSDV $4.12 $4.08 $0.00 -1.1% 0.1%
TSRA $38.94 $35.93 $0.20 -7.2% 0.1%
KORS $62.24 $42.49 $0.00 -31.7% 0.1%
DEPO $23.50 $30.14 $0.00 28.3% 0.1%
Totals -3.9% 0.1%
Category/Tranche August November February May Total
Initial Investment      25,000       25,000     25,000      25,000    100,000
Current Tranche 9.9% 42.0% 35.7% -3.9% 21.3%
Previous Tranche 41.4% 14.2% 8.5% 18.3% 19.4%
Tranche -2 14.1% 43.7% 78.3% 33.0% 42.3%
MFI Overall Gain 77.3% 133.1% 162.4% 51.2% 106.0%
Current Balance      44,335       58,267     65,607      37,800    206,009
R3K Current Tranche 8.3% 3.8% 5.3% 0.1% 4.4%
R3K Overall Gain 57.9% 62.5% 44.0% 34.3% 49.7%
R3K Balance      39,487       40,627     36,012      33,587    149,713
Annualized IRR 21.8% 37.6% 48.5% 20.9% 33.3%


So the MFI select approach continues to work quite well.  Here are month by month movements:

Date Differential MFI Value R3K Value
12/1/2012 -2.20%       99,765         101,965
1/1/2013 -1.78%      102,798         104,575
2/1/2013 -2.26%      102,594         104,856
3/1/2013 -2.23%      102,881         105,114
4/1/2013 -0.43%      106,804         107,234
5/1/2013 2.00%      110,423         108,423
6/1/2013 4.75%      115,831         111,085
7/1/2013 4.29%      114,888         110,597
8/1/2013 6.91%      124,799         117,889
9/1/2013 10.46%      124,536         114,079
10/1/2013 19.67%      138,655         118,990
11/1/2013 19.75%      143,514         123,764
12/1/2013 23.70%      150,105         126,405
1/1/2014 26.63%      157,138         130,503
2/1/2014 24.70%      150,619         125,918
3/1/2014 25.66%      158,116         132,458
4/1/2014 30.38%      162,991         132,616
5/1/2014 29.65%      162,428         132,779
6/1/2014 31.44%      167,001         135,559
7/1/2014 39.23%      177,971         138,740
8/1/2014 31.13%      167,054         135,922
9/1/2014 35.90%      177,792         141,892
10/1/2014 29.38%      168,321         138,944
11/1/2014 26.14%      168,810         142,666
12/1/2014 30.22%      176,420         146,198
1/1/2015 28.17%      174,306         146,140
2/1/2015 20.63%      162,833         142,201
3/1/2015 25.15%      175,476         150,324
4/1/2015 29.95%      178,565         148,612
5/1/2015 37.31%      186,655         149,348
6/1/2015 51.53%      202,897         151,371
7/1/2015 62.69%      211,437         148,743
Current 56.30%      206,009         149,713

So you can see in July I have given some of lead back.  That is largely because NHTC has dropped about 10%.  I have started thinking a bit about August 15th new stocks.  Just off top of my head: SNDK, KORS, CBI, VA and VEC all seem pretty cheap. But still a month to run.

MFI Formula

Now the formula approach, where I now have four tranches picked purely by formula (stocks from the screen over $600m market cap and 2.4% dividend).  In total, the approach has been solid for me.  GME and RGR have really helped.

10/1/2014 Stocks Start Current Dividend Pct Gain R3K Gain
BAH $23.52 $25.94 $0.37 11.8% 7.8%
BKE $45.55 $46.27 $3.45 9.2% 7.8%
CA $27.87 $30.34 $0.75 11.5% 7.8%
GME $41.70 $46.96 $1.05 15.1% 7.8%
NUS $44.56 $41.62 $1.05 -4.3% 7.8%
Totals 8.7% 7.8%
12/31/14 Stocks Start Current Dividend Pct Gain R3K Gain
CA $30.83 $30.34 $0.50 0.0% 1.3%
CSCO $28.36 $27.28 $0.61 -1.7% 1.3%
RGR $34.81 $57.43 $0.49 66.4% 1.3%
GME $34.21 $46.96 $0.72 39.4% 1.3%
IQNT $19.87 $17.76 $0.30 -9.1% 1.3%
Totals 19.0% 1.3%
3/31/2015 Start Current Dividend Pct Gain R3K Gain
HRB $31.99 $31.18 $0.20 -1.9% 0.0%
GME $37.69 $46.96 $0.36 25.6% 0.0%
KING $15.85 $14.68 $0.00 -7.4% 0.0%
NSU $3.43 $3.55 $0.04 4.7% 0.0%
PPC $22.65 $22.59 $0.00 -0.3% 0.0%
Totals 4.1% 0.0%
7/1/2015 Start Current Dividend Pct Gain R3K Gain
BKE $46.45 $46.27 $0.00 -0.4% 0.1%
CA $29.34 $30.34 $0.00 3.4% 0.1%
MSFT $44.42 $44.61 $0.00 0.4% 0.1%
QCOM $62.95 $62.73 $0.00 -0.3% 0.1%
VIAB $64.75 $61.80 $0.00 -4.6% 0.1%
Totals -0.3% 0.1%

Date Differential Value R3K Value
10/1/2014 0.00%      100,000         100,000
11/1/2014 1.63%      102,288         100,658
12/1/2014 0.30%      101,375         101,075
1/1/2015 -0.33%      100,664         100,995
2/1/2015 1.67%      101,281           99,611
3/1/2015 3.62%      106,073         102,454
4/1/2015 5.09%      106,781         101,695
5/1/2015 5.78%      107,859         102,077
6/1/2015 5.08%      108,213         103,134
7/1/2015 4.82%      106,423         101,604
Current 5.58%      107,847         102,268

MFI Index

I haven't commented on my MFI Index recently. As a reminder, I create this index at the start of each year (back to 2006). It is very simply the top 50 stocks over $100m at the start of each year held for a year.

Annual Inception to Date
Year Russell MFI Russell ITD MFI ITD
2006 11.40% 15.03% 11.40% 15.03%
2007 4.09% -6.69% 15.96% 7.34%
2008 -37.05% -37.97% -27.00% -33.42%
2009 32.51% 45.18% -3.27% -3.34%
2010 18.38% 22.77% 14.50% 18.67%
2011 -0.56% -10.47% 13.87% 6.25%
2012 16.43% 9.70% 32.57% 16.56%
2013 33.01% 51.70% 76.34% 76.82%
2014 12.26% 12.07% 97.95% 98.15%
2015 2.46% 3.86% 100.36% 101.94%

As you can see, since the start it is pretty much a dead heat: +100.36% versus +101.94%. Winning by a bit more than a percentage point this year at +3.8%.  GARIX, which is a long short MFI fund is down by 6% for the year.  But the out performance is driven by just several names.


Stock Start 30-Jun Current YTD Change Q3 Change
  ADMS      17.37         26.22         27.41 57.8% 4.5%
  AFOP      14.51         18.55         19.96 37.6% 7.6%
  ANIK      40.74         33.03         33.33 -18.2% 0.9%
  APOL      34.11         12.88         14.01 -58.9% 8.8%
  AGX      33.64         40.33         39.97 18.8% -0.9%
  AVID      14.21         13.34         13.38 -5.8% 0.3%
  AWRE         4.54           4.03            4.00 -11.9% -0.7%
  BCOR      13.85         16.15         15.74 13.6% -2.5%
  BKE      52.52         49.00         49.50 -5.8% 1.0%
  CA      30.45         29.79         30.84 1.3% 3.5%
  CSCO      27.82         27.86         27.89 0.3% 0.1%
  COH      37.56         34.95         33.72 -10.2% -3.5%
  DLX      62.25         62.60         61.44 -1.3% -1.9%
  DEPO      16.11         21.46         30.14 87.1% 40.4%
  EBIX      16.99         32.69         32.67 92.3% -0.1%
  FLR      60.63         53.43         51.16 -15.6% -4.2%
  GME      33.80         43.68         47.68 41.1% 9.2%
  GORO         3.38           2.82            2.55 -24.6% -9.6%
  ONE         4.21           2.99            2.80 -33.5% -6.4%
  IQNT      19.63         18.55         17.91 -8.8% -3.5%
  IDCC      52.90         57.29         55.90 5.7% -2.4%
  IILG      20.89         23.09         22.57 8.0% -2.3%
  ITRN      22.04         25.26         25.23 14.5% -0.1%
  KING      15.36         15.19         15.62 1.7% 2.8%
  LCI      42.88         59.44         59.93 39.8% 0.8%
  LFVN         1.30           0.53            0.54 -58.5% 1.9%
  LQDT         8.17           9.63            9.35 14.4% -2.9%
  MSB      17.28         14.24         13.04 -24.5% -8.4%
  NHTC      11.45         41.51         37.62 228.6% -9.4%
  NSR      27.80         29.21         29.01 4.4% -0.7%
  NUS      43.70         47.83         42.32 -3.2% -11.5%
  PDLI         7.71           6.58            6.45 -16.3% 0.0%
  PFMT         6.65           3.24            3.15 -52.6% -2.8%
  PETS      14.37         17.44         18.17 26.4% 4.2%
  PBI      24.37         21.19         21.46 -12.0% 1.3%
  RPXC      13.78         16.90         16.30 18.3% -3.6%
  SPOK      17.36         17.09         16.67 -4.0% -2.5%
  STRA      74.28         43.10         45.69 -38.5% 6.0%
  RGR      34.63         57.94         57.92 67.3% 0.0%
  TTWO      28.03         27.57         28.26 0.8% 2.5%
  TDC      43.68         37.00         35.93 -17.7% -2.9%
  TZOO      12.62         11.28         11.95 -5.3% 5.9%
  TPUB      22.90         15.72         16.19 -29.3% 3.0%
  UBNT      29.64         31.92         32.88 10.9% 3.0%
  UIS      29.48         19.99         20.02 -32.1% 0.2%
  USNA    102.59      136.66       135.16 31.7% -1.1%
  VEC      27.40         24.87         24.13 -11.9% -3.0%
  VIAB      75.25         64.97         62.13 -17.4% -4.4%
  WTW      24.84           4.85            3.97 -84.0% -18.1%
  WILN         2.99           2.40            2.17 -27.4% -9.6%
Total    19,816      20,600       20,580 3.9% -0.1%

Dividends

Monday is s strange day. I have four stocks (FSCBKEREXI and NTC) going x-dividend. I acn't really explain it but I get great satisfaction of a stock/security going x-dividend.  It is income.  It is tangible. If I reinvest (which I do with FSC and NTC), then my share count goes up. And then I eventually get dividends on dividends.  Here is a table, using my multiplier of dividends on dividends I have gotten:


Row Labels Sum of Cost Sum of Value Sum of Dividends Sum of Gain Sum of Shares
CSQ 21,084 21,761 3,113 3,791 1,987
AOD 19,331 19,658 1,684 2,011 2,265
OIBAX 9,461 8,978 1,917 1,434 1,559
O 6,197 7,860 1,063 2,726 170
NTC 6,345 6,318 214 186 505
FSC 4,140 3,907 52 -181 597
Grand Total 66,558 68,481 8,044 9,967 7,083

So the way to read this is for CSQ I have received $21,084 of dividends.  They have all been reinvested and are now worth $21,761.  And they have generated an additional $3,113 of dividends. In total I have added 1,987 shares with the reinvested dividends.

1 comment:

John Carney said...

Marsh,

My MFI formula is +11.2% for tranche #1, +2.9% for #2, -5.5% for #3, and -1.0% for #4. My total is at $101,552 or +1.5% a little under the index at +2.1%. This includes dividends for my 20 stocks and also for the index.

It is early but I am not beating the index. It is not working for me. I am jealous. I was running neck and neck with you until May 1st.

The only good news is my MFI Formula PAPER trades are up +3.2% over the index with 22 stocks. I bought 13 at one time and added the rest at about 2 per month. The 22 were sold at the end of one year.