Tuesday, August 02, 2016

July 30th, 2015 Monthly Tracking Portfolio

Magic Formula Investing Tracking

Another month/year has flown by. And so it is time to look at another monthly tracking portfolio as we reach August 2016 (I actually stopped this portfolio a day late... gasp!).  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) was a virtual tie. That breaks a streak of  15 of the last 16 to close have lost. In addition, after 5 straight portfolios losing money, this one was up 4%.  Here are the 50 stocks in descending performance order:

Stock  Initial Price   End Price  Percent Change  52 week low   Mkt Cap 
WTW                4.14           11.15 169.3%                 4.10            236
GORO                2.17             5.74 164.3%                 1.14            121
ONE                2.29             5.15 124.9%                 1.85            110
COH              30.09           43.46 44.4%               27.22         8,642
ETM              10.21           13.93 36.4%                 8.88            391
VEC              23.09           31.28 35.5%               17.25            243
PETS              16.37           20.81 27.2%               14.53            342
KORS              42.12           52.90 25.6%               34.83         8,551
CA              28.38           34.85 22.8%               25.16       12,827
IQNT              17.08           20.89 22.3%               14.56            594
AGX              38.25           46.79 22.3%               28.03            572
CPLA              49.53           59.95 21.0%               39.06            619
PPC              19.63           23.24 18.4%               17.39         5,692
APEI              25.33           29.72 17.3%               13.80            434
CLCT              18.64           21.82 17.1%               11.66            179
KING              15.47           18.00 16.4%               12.00         4,878
HPQ              30.43           35.26 15.9%                 8.91       55,330
CSCO              27.35           30.73 12.3%               22.46     144,132
BBY              30.70           33.47 9.0%               25.31       11,346
DLX              62.93           67.49 7.2%               49.46         3,212
IDCC              55.32           59.23 7.1%               41.01         2,018
NSU                3.25             3.47 6.6%                 2.27            685
NHTC              32.19           33.90 5.3%               15.90            401
TIVO              10.07           10.52 4.5%                 7.29            978
QCOM              62.06           61.85 -0.3%               42.24     101,639
PBI              19.66           19.06 -3.1%               16.24         4,131
PSDV                4.06             3.93 -3.2%                 2.37            119
LQDT                8.73             8.27 -5.3%                 4.42            262
WILN                1.96             1.82 -7.1%                 0.93            245
DHX                7.92             7.26 -8.3%                 5.99            410
MSB              10.35             9.40 -9.2%                 3.00            143
BRCD              10.18             9.22 -9.4%                 7.40         4,338
AAPL            119.91         106.05 -11.6%               89.47     698,170
NSR              29.01           25.04 -13.7%               20.00         1,582
STRA              55.85           46.55 -16.7%               42.39            616
VIAB              54.26           44.35 -18.3%               30.11       22,381
TDC              36.60           28.39 -22.4%               21.98         5,194
HRB              32.43           23.92 -26.2%               19.18         9,178
GME              44.20           30.35 -31.3%               24.33         4,944
KFY              32.95           22.53 -31.6%               18.57         1,690
PDLI                5.22             3.55 -31.9%                 2.58            942
XENE              11.06             7.44 -32.7%                 5.65            157
BKE              41.10           27.37 -33.4%               22.00         2,138
EVOL                7.94             5.24 -34.0%                 4.79            100
RPXC              15.30           10.02 -34.5%                 8.60            870
UIS              15.94             9.86 -38.1%                 6.72            796
LCI              59.44           31.10 -47.7%               16.91         2,148
VNCE                9.95             4.93 -50.5%                 3.31            366
ENTA              49.64           22.30 -55.1%               16.75            928
NLNK              51.16           10.49 -79.5%                 9.23         1,656


14 of the 50 stocks are down 20% or more over a year - that at least is better than the 21 last month.  We did have three big winners this time though, WTW, GORO and ONE.

I have mentioned that a "Dogs of MFI" approach has shown some promise.  ENTA 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 4.1% 10.0% 0
9/25/2015 5.4% 13.3% 0
10/30/2015 4.0% 5.8% 0
11/27/2015 2.4% 4.8% 0
12/31/2015 6.7% 7.5% 0
1/29/2016 15.2% 14.0% 1
2/26/2016 12.2% 13.2% 0
3/24/2016 14.4% 8.1% 1
4/22/2016 3.7% 4.5% 0
5/27/2016 9.0% 4.0% 1
6/30/2016 8.0% 3.8% 1


So technically, when you go out two decimal places, this is a loss.

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 very good, up about 13.5%.   The Dogs portfolio was great (helped by WTW), up 44%.  The New approach was solid, up 9% (only BBY).  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      181,707
Total Russell 3K      207,231
New      166,534
Dogs      255,738
Dividend      401,617

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