Strange Day

Strange Day

Very weird day for my stocks.  All-in-all, it was not a great day, down about 50 basis points.  What was strange (or interesting) is that I had a great PM bounce on little news.

HRB was a total disaster post earnings. It was down over 10% (21.66)... which was better than mid day low (20.56).  I seem to own more than the normal share of these challenged companies as we have the disruption of the internet.

SJT was down almost 5%, which hurts as it is a large position. I guess natural gas prices were down. Oil  was down a lot as well.

SPCB was also down 4% as it seems more and more like a bad decision.  I keep thinking this should be a $6 to $7 stock, but until they "show me",  it will likely drift (currently at 3.29).

But there was good news, or I should say good action as well.

GNC was very strange. I had doubled my position on Monday as I convinced myself that they are a likely takeover candidate and even if they are not taken over, I think downside is limited (though I am sometimes wrong about that).  The stock was meandering all day,  up about 1% on normal volume  at 12:30.  Then it just shot up. A full dollar (5%) as 475,000 shares changed hands around 12:50.  It ended up 6% on 2.5x normal volume.

WLDN was a similar story. At 12:45 it was down a percentage point to 16.31.  Then it popped over the next hour to 17.07.  It continued going up and ended at 17.43.  This is all on 10x normal volume.

Oh well, we will see what tomorrow brings.

Some Times You Have To Dig

Digging For Info

I was reading a short blurb about UTHR yesterday

Why UTHR Trades at Lower Multiples Compared to Its Peers

I was expecting some great insight. But all I found was this:

The sale of a substantial number of United Therapeutics’ shares by insiders can be considered a guiding influence on the company’s share price and valuation multiples. 

Ok.  I am not crazy about insider sales.  So I looked further.  The CEO has sold quite a few shares. In fact, Yahoo Finance says she only has 400 shares left. That seemed to me a concern

Has her selling caused the lowered valuation?  Does she really have 400 shares left? Enquiring minds want to know!  First, I looked over time. She has been selling a couple thousand shares a month for several years.  I think it is hard to make a case that their recent "cheapness" is due to her selling as it has been ongoing.

Then, how can she just have 400 shares yet be selling over 1,000 every month? Is dark magic at play?  I went to Sec.Gov and checked her form 4.  It shows that while she personally only has the 400 shares, she controls a trust of over 600,000 shares!

Oh.

That seems good to know.  So she has over $76 million of direct interest in UTHR doing well.  I had tried to find this in several spots on the internet, but had to go to the source documents.  I feel better now.

VEC - One of My Best Stocks Ever!

One of my MFI stocks, VEC, is up 3% today on moderate volume. This has been a terrific stock for me, so I pulled up my buys and sells.

This stock was a spin off (I think from XLS) back in 2014.

1. Bought 10/2/14 and sold two weeks later for a 5% gain.
2. Bought 10/20/14 and sold three weeks later for a 24% gain.
3. Bought 10/21/14 and sold three weeks later for a 30% gain. These two trades made me a lot of money over three weeks. The spinoff had just happened and I think some big funds were forced to sell it.
4. Bought 1/30/15 for MFI and sold a year later for a 29% loss (the one bad trade)
5. Bought 11/15/15 for MFI, currently up 41%
6. Bought 1/30/16 for MFI, currently up 70%.


My annualized IRR is 460%.  Should have bet the farm!

Magic Formula Investing Tracking Portfolio - 8/26/2015

Monthly Tracking Portfolio

Another month/year has flown by. And so it is time to look at another monthly tracking portfolio as we reach the end of August 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 (wait for it) lost by 5.5 percentage points.. Technically, 16 of the past 17 have lost, although last month was almost a tie. Here are the 50 stocks in descending performance order:

Stock	Initial Price	End Price	Percent Change	52 week low	Mkt Cap
WTW	5.98	10.75	79.8%	5.63	341
VA	32.76	55.97	70.8%	26.30	1,418
NATH	33.65	48.60	44.4%	32.00	155
IDCC	48.70	69.82	43.4%	41.01	1,777
NLS	16.22	22.50	38.7%	13.82	512
VEC	24.05	33.18	38.0%	17.25	254
KING	13.50	18.00	33.3%	12.00	4,250
LBMH	2.52	3.35	32.9%	1.96	137
LQDT	7.36	9.67	31.4%	4.42	221
CA	26.34	34.08	29.4%	25.18	11,885
AGX	37.97	48.91	28.8%	28.03	568
PETS	15.90	20.22	27.2%	15.56	335
CPLA	47.75	60.44	26.6%	39.06	596
CSCO	25.13	31.35	24.7%	22.46	131,638
VC	57.09	71.06	24.5%	58.83	3,909
PPC	18.63	22.84	22.6%	17.39	5,404
CLCT	16.88	20.63	22.2%	13.67	162
NHTC	26.53	32.36	22.0%	15.90	331
DLX	57.64	68.74	19.3%	49.46	2,939
TIVO	9.15	10.86	18.7%	7.29	888
FLR	44.86	52.94	18.0%	39.48	6,637
GHM	16.58	19.32	16.5%	14.39	172
KORS	43.17	49.59	14.9%	34.83	8,493
QCOM	55.36	62.97	13.8%	42.24	90,656
TDC	29.49	32.29	9.5%	21.98	4,176
VDSI	17.59	18.71	6.4%	12.35	700
VIAB	39.39	41.11	4.4%	30.11	16,278
SPOK	15.95	16.64	4.4%	15.49	359
HSII	19.16	19.27	0.6%	16.23	359
PSDV	3.94	3.93	-0.3%	2.37	116
PBI	19.15	18.77	-2.0%	16.24	4,030
DHX	7.82	7.54	-3.6%	5.99	405
AAPL	110.92	106.94	-3.6%	89.47	646,365
STRA	52.87	50.23	-5.0%	42.39	583
IQNT	17.92	16.17	-9.7%	14.56	625
OUTR	60.10	51.87	-13.7%	24.81	1,135
NSR	28.21	23.78	-15.7%	20.00	1,547
WILN	1.92	1.59	-17.2%	0.93	240
MSB	12.33	9.91	-19.6%	3.00	171
APOL	11.47	8.83	-23.0%	6.31	1,235
RPXC	13.83	10.49	-24.2%	8.60	786
GILD	105.79	79.77	-24.6%	77.92	158,760
UIS	13.95	10.18	-27.0%	6.72	697
VNCE	9.06	6.35	-29.9%	3.31	333
LCI	49.87	34.23	-31.4%	16.91	1,809
BKE	39.73	26.82	-32.5%	22.00	2,067
ICON	13.52	8.50	-37.1%	4.67	654
PDLI	5.12	2.86	-44.1%	2.58	924
ENTA	41.18	22.38	-45.7%	16.75	770
NLNK	47.75	10.05	-79.0%	9.23	1,551

I find it telling that 4 of the bottom six are in the pharma space in some way.  I have mentioned that a "Dogs of MFI" approach has shown some promise.  ENTA, ICON, PDLI and UIS 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	-15.4%	-0.8%	0
5/29/2015	-14.1%	0.1%	0
6/26/2015	-8.7%	0.4%	0
7/30/2015	3.96%	4.02%	0
8/28/2015	5.6%	10.2%	0
9/25/2015	8.5%	13.5%	0
10/30/2015	6.2%	6.1%	1
11/27/2015	4.6%	5.0%	0
12/31/2015	9.1%	7.7%	1
1/29/2016	16.3%	14.3%	1
2/26/2016	14.2%	13.4%	1
3/24/2016	13.6%	8.3%	1
4/22/2016	4.2%	4.8%	0
5/27/2016	9.2%	4.3%	1
6/30/2016	9.9%	4.0%	1
7/29/2016	2.1%	0.1%	1

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 ok, up about 8.5%.   The Dogs portfolio was subpar, up 3.6%.  The New approach was solid, up 8.3% (led by NLS and VC).  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	184,344
Total Russell 3K	207,647
New	173,160
Dogs	252,088
Dividend	394,652