Thursday, March 31, 2016

3/31/15 MFI Formula Tranche - Finito

End of 3/31/15 Tranche

My 3/31/15 MFI formula tranche hit one year today. I sold the positions that were underwater. KING had already been sold post AVTI acquisition. Tomorrow I will sell PPC.

It is interesting that KING and PPC were the two best performers, yet neither paid a dividend during the year (on the list due to special dividends).

The tranche was a push in all ways. It edged out the benchmark, but also had a slight loss.

3/31/2015  Start   Current   Dividend   Pct Gain   R3K Gain 
 HRB  $31.99 $26.33 $0.80 -15.2% -1.1%
 GME  $37.69 $32.12 $1.45 -10.9% -1.1%
 KING  $15.85 $18.00 $0.00 13.6% -1.1%
 NSU  $3.43 $3.24 $0.16 -0.8% -1.1%
 PPC  $22.65 $25.40 $0.00 12.1% -1.1%
 Totals  -0.2% -1.1%


Meh.  I did a run today to see what stocks might be eligible tomorrow.

Number Ticker Market Cap Price Dividend Yield
1 BBY              10,569         32.52              1.12 3.4%
2 BKE                 1,652         34.12              1.00 2.9%
3 CALM                 2,555         52.69              3.00 5.7%
4 CPLA                    625         52.84              1.56 3.0%
5 CSCO            143,123         28.33              1.04 3.7%
6 GME                 3,234         30.83              1.48 4.8%
7 HPQ              21,157         12.18              0.50 4.1%
8 LDOS                 3,524         48.95              1.28 2.6%
9 OUTR                    631         37.99              2.40 6.3%
10 PBI                 4,188         21.26              0.75 3.5%
11 TSRA                 1,580         31.09              0.80 2.6%
12 TIME                 1,639         15.42              0.76 4.9%
13 VIAB              16,422         41.46              1.60 3.9%

I am not sure if I'll  discard any options (recall I allow myself one). I will rerun tomorrow morning in event something changes.
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Saturday, March 26, 2016

MFI TRacking Portfolio - 3/27/15

MFI Tracking Portfolio

Another month/year has flown by. And so it is time to look at another monthly tracking portfolio as we near leap day 2016.  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, MFI lost by about 15 points. That makes it 12 of the last 13 to close have lost. In addition, this was the fifth straight portfolio to lose $ (though sadly 11 of the 11 open ones are also in the red).  Here are the 50 stocks in descending performance order:

Stock  Initial Price   End Price  Percent Change 52 week low  Mkt Cap 
NHTC              17.58           32.02 82.1%           15.90            226
ONE                2.31             3.85 66.7%             1.85            110
MSFT              39.88           54.21 35.9%           39.72     336,692
SNDK              63.99           75.66 18.2%           44.28       15,179
KING              15.53           18.00 15.9%  N/A          5,000
PETS              15.50           17.43 12.5%           14.53            328
NSR              24.15           26.59 10.1%           20.00         1,330
ANIK              40.81           44.00 7.8%           30.93            606
IDCC              49.77           53.56 7.6%           41.01         1,867
CSCO              26.30           27.96 6.3%           22.46     138,553
PPC              23.71           24.09 1.6%           17.39         6,141
AGX              34.00           34.13 0.4%           28.03            504
IQNT              15.45           15.24 -1.4%           14.56            534
PENN              15.53           15.10 -2.8%           12.51         1,229
FLR              55.79           54.12 -3.0%           39.48         8,436
HPQ              31.13           29.64 -4.8%             8.91       57,375
PBI              22.48           20.90 -7.0%           16.24         4,689
GILD              99.33           91.32 -8.1%           81.89     151,399
BRCD              11.26           10.30 -8.5%             7.40         4,855
WILN                2.32             2.12 -8.7%             0.93            293
DLX              65.58           59.87 -8.7%           49.46         3,339
ENTA              31.35           27.03 -13.8%           16.75            583
HRB              31.24           26.61 -14.8%           26.60         8,816
VEC              25.59           21.75 -15.0%           17.25            268
GME              36.91           30.27 -18.0%           24.33         4,130
ADMS              17.50           14.17 -19.0%           12.02            307
TZOO                9.64             7.79 -19.2%             6.63            142
CPLA              64.79           51.91 -19.9%           39.06            818
STRA              59.93           47.94 -20.0%           41.50            653
QCOM              64.76           50.86 -21.5%           42.24     110,859
TSRA              38.92           30.39 -21.9%           26.21         2,108
RPXC              14.22           10.80 -24.1%             9.15            801
CLCT              20.86           15.58 -25.3%           11.66            200
GORO                3.20             2.30 -28.1%             1.14            180
BKE              46.43           33.21 -28.5%           26.05         2,388
PSDV                4.03             2.71 -32.8%             2.37            119
VIAB              65.56           39.68 -39.5%           30.11       27,635
TDC              42.71           25.85 -39.5%           21.98         6,317
DEPO              22.67           13.31 -41.3%           12.25         1,344
EGL              31.97           17.69 -44.7%           11.46            562
LQDT                9.80             5.11 -47.9%             4.42            294
PDLI                6.32             3.11 -50.8%             2.58         1,135
PFMT                3.34             1.64 -50.9%             1.51            165
ACHI                5.83             2.65 -54.5%             1.77            560
AVID              14.73             6.44 -56.3%             5.77            579
MSB              14.96             6.20 -58.6%             3.00            200
VNCE              17.04             6.31 -63.0%             3.31            626
BCOR              14.00             4.88 -65.1%             4.79            572
UIS              23.00             7.79 -66.1%             7.10         1,143
SMT                1.18             0.37 -68.3%             0.19            145


Obviously when 22 of the 50 stocks are down 20% or more over a year - it is a struggle.

I have mentioned that a "Dogs of MFI" approach has shown some promise.  MSB and DEPO are still on the list.  It would take some courage to buy any of those - but I guess that is why they are called dogs. 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 8.6% 15.8% 0
5/30/2014 5.9% 11.7% 0
6/27/2014 2.5% 9.2% 0
7/25/2014 3.3% 8.7% 0
8/29/2014 -2.2% 1.0% 0
9/26/2014 -0.6% -0.9% 1
10/31/2014 4.3% 4.4% 0
11/28/2014 -2.9% 2.9% 0
12/31/2014 -9.3% 0.3% 0
1/30/2015 -12.4% -2.8% 0
2/27/2015 -19.0% -7.3% 0
3/27/2015 -17.1% -1.9% 0
4/24/2015 -20.3% -4.5% 0
5/29/2015 -18.7% -4.1% 0
6/26/2015 -14.6% -4.2% 0
7/30/2015 -8.0% -4.2% 0
8/28/2015 -4.0% 1.3% 0
9/25/2015 -0.7% 4.3% 0
10/30/2015 -8.9% -2.5% 0
11/27/2015 -6.9% -3.5% 0
12/31/2015 -2.1% -1.0% 0
1/29/2016 4.3% 5.0% 0
2/26/2016 3.8% 4.3% 0

So you can see the -17.1% to -1.9% loss in 3/27/15. Sadly, as my gentle readers have noted, MFI isn't doing so well of late.  And 11 of the other 11 open portfolios are trailing - several by a wide margin. Just 1 win/lead in past 22.  Ouch.

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 have added 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 terrible, down about 15%. (PDLI, MSB, TPUB etc)  The Dogs portfolio was worse, down 34% (mostly BCOR &; UIS).  The New approach was also bad, down 22% (mainly VNCE).  I think we can safely say that nothing besides 100% NHTC was working. 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      162,517
Total Russell 3K      189,441
New      150,786
Dogs      228,402
Dividend      351,316

That is a sobering table.  It strongly indicates (assuming a guy with a spreadsheet hasn't made too many errors) that for the $100m + bucket that it hasn't worked very well since 2006.  


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