MFI has had some dry spells in the past, but it is really being tested of late. All I know is that if it is supposed to outperform, we have some very good days ahead. Cause it is not a pretty picture right now.
Here are the 12 open portfolios. The first figure is MFI return. The second is Russell 3000.
| 2/27/2015 | -25.2% | -11.7% |
| 3/27/2015 | -25.7% | -10.4% |
| 4/24/2015 | -28.1% | -12.8% |
| 5/29/2015 | -25.0% | -12.4% |
| 6/26/2015 | -22.9% | -12.5% |
| 7/30/2015 | -18.3% | -12.5% |
| 8/28/2015 | -14.4% | -7.5% |
| 9/25/2015 | -13.4% | -4.7% |
| 10/30/2015 | -17.6% | -11.0% |
| 11/27/2015 | -15.7% | -11.9% |
| 12/31/2015 | -11.6% | -9.6% |
| 1/29/2016 | -4.7% | -4.1% |
| Average | -18.6% | -10.1% |
All twelve are losing - by a wide margin. In the past 23 tranches, including the 12 shown here, MFI has won a single time.
Why?
The easy answer might be that value stocks generally are struggling. A key assumption of MFI is that the income a company made the past 12 months is a good proxy for the upcoming year. There are times and stocks for which that is a poor assumption. Look at the worst performers of the Feb 2015 tranche:
| Stock | Initial Price | End Price | Percent Change |
| SMT | 1.27 | 0.24 | -80.9% |
| MSB | 17.15 | 4.47 | -73.9% |
| APOL | 27.65 | 8.60 | -68.9% |
| EGL | 36.10 | 11.79 | -67.3% |
| TPUB | 20.22 | 7.00 | -65.4% |
| ACHI | 6.10 | 2.60 | -57.4% |
| AVID | 15.68 | 6.73 | -57.1% |
| UIS | 22.64 | 10.21 | -54.9% |
| LQDT | 9.88 | 4.50 | -54.5% |
| PDLI | 6.23 | 2.92 | -53.2% |
| BCOR | 14.82 | 7.04 | -52.5% |
| VIAB | 67.95 | 32.81 | -51.7% |
| GORO | 3.33 | 1.69 | -49.2% |
| TDC | 44.52 | 23.07 | -48.2% |
| WILN | 2.48 | 1.29 | -48.1% |
| VEC | 31.81 | 18.21 | -42.8% |
| BKE | 47.32 | 29.22 | -38.3% |
| BRCD | 12.19 | 7.81 | -36.0% |
| RPXC | 14.58 | 9.41 | -35.5% |
| PSDV | 4.40 | 2.86 | -35.0% |
| CPLA | 62.99 | 42.07 | -33.2% |
| TSRA | 39.36 | 26.57 | -32.5% |
| CLCT | 21.05 | 14.78 | -29.8% |
| STRA | 60.87 | 43.37 | -28.7% |
| TZOO | 10.08 | 7.39 | -26.7% |
| ENTA | 35.82 | 26.70 | -25.5% |
| PBI | 22.57 | 16.88 | -25.2% |
| GME | 35.65 | 26.98 | -24.3% |
| FLR | 57.27 | 43.64 | -23.8% |
| NSR | 26.52 | 21.03 | -20.7% |
| DLX | 65.57 | 52.14 | -20.5% |
- MSB had $24m of Op Income year ending Jan 2015. The past three quarters: $5.8.
- APOL had $249 TTM op income last February. Now it is $9.2m.Whoa.
- EGL Did not drop off much - but guidance given in January this year caused a one day drop of 41%.
- TPUB has dropped Op Inc from $86m to $50m. And it is falling rapidly.
I could go on. But you get the picture.
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