Saturday, December 31, 2016

Weekend Update - Happy New Year 2017!

Happy New Year

Final weekend update of 2016. It was a solid year for me. I did edge out the benchmark a bit. It was a bit of a roller coaster... but that seems to be the norm.

as my readers know, this is a blog called the MFI Diary that focuses on Magic Formula Investing by Joel Greenblatt.  I have two real life, real money portfolios - one is as described in the book, where I pick 5 stocks a quarter and hold for a year (MFI Select) and the second is the same, except instead of my picking, i use a formula (MFI Formula). My formula is to run a screen on the top 50 stocks and then pick those with a dividend > 2.4% and market cap >$600m.  I am toying with changing the market cap to just discarding the smallest 17 (that makes it relative).

MFI Index

I do maintain an MFI Index and have tracked it since 2006. I reconstitute the stocks once a year, so Tuesday will have new names.  Here is the year by year results:


 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 0.38% -8.95% 98.33% 89.37%
2016 12.50% 13.19% 110.62% 101.16%


Here are my personal results during 2016:


 Component   YTD 
 Overall  +14.92%
 Select  -0.01%
 Formula  +17.12%
 Miscellaneous  +24.39%
 Dividend  +22.81%
 R3K  +12.50%
 MFI Index  +13.19%

Miscellaneous was up so much because of the BAC Warrants (by far my largest holding). They were up 71%. Also WLDN was more than a double and ONE was a double.

Dividend was up because of REXI and SJT (both up over 50%).

MFI Select

Here are my current holdings:

2/1/2016  Start   Current   Dividend   Pct Gain   R3K Gain 
 VEC  $19.64 $23.85 $0.00 21.4% 19.3%
 QCOM  $45.18 $65.20 $2.07 48.9% 19.3%
 PERI  $2.45 $1.42 $0.00 -42.0% 19.3%
 DEPO  $15.34 $18.02 $0.00 17.5% 19.3%
 TDC  $24.02 $27.17 $0.00 13.1% 19.3%
 Totals  11.8% 19.3%
5/6/2016  Start   Current   Dividend   Pct Gain   R3K Gain 
 BRCD  $7.97 $12.49 $0.17 58.8% 11.9%
 CBI  $37.82 $31.75 $0.00 -16.0% 11.9%
 HSII  $18.51 $24.15 $0.26 31.9% 11.9%
 RHI  $38.51 $48.78 $0.66 28.4% 11.9%
 UTHR  $107.99 $143.43 $0.00 32.8% 11.9%
 Totals  27.2% 11.9%
8/15/2016  Start   Current   Dividend   Pct Gain   R3K Gain 
 CSCO  $31.20 $30.22 $0.26 -2.3% 3.9%
 GNC  $19.79 $11.04 $0.38 -42.3% 3.9%
 VLO  $54.73 $68.32 $0.60 25.9% 3.9%
 MSGN  $16.68 $21.50 $0.00 28.9% 3.9%
 GILD  $79.33 $71.61 $0.94 -8.5% 3.9%
 Totals  0.3% 3.9%
11/15/2016  Start   Current   Dividend   Pct Gain   R3K Gain 
 MPAA  $26.55 $26.92 $0.00 1.4% 3.7%
 ATHM  $22.61 $25.28 $0.00 11.8% 3.7%
 AMGN  $145.14 $146.21 $0.00 0.7% 3.7%
 RHI  $43.23 $48.78 $0.22 13.3% 3.7%
 CA  $31.11 $31.77 $0.00 2.1% 3.7%
 Totals  5.9% 3.7%
 Category/Tranche   August   November   February   May   Total 
 Initial Investment         25,000          25,000       25,000        25,000         100,000
 Current Tranche  0.3% 5.9% 11.8% 27.2% 9.6%
 Previous Tranche  2.8% 8.0% -14.3% -25.2% 6.4%
 Tranche -2  11.2% 69.4% 8.5% 18.3% 26.8%
 Tranche -3  41.4% 14.2% 78.3% 33.0% 41.7%
 Tranche -4  14.1% 43.7% 0.0% 0.0% 14.5%
 MFI Overall Gain  85.1% 218.2% 85.2% 49.5% 109.5%
 Current Balance         46,265          79,548       46,306        37,384         209,503
 R3K Current Tranche  3.9% 3.7% 19.3% 11.9% 9.7%
 R3K Overall Gain  73.6% 76.7% 59.0% 33.0% 58.9%
 R3K Balance         41,779          44,187       39,738        33,238         158,941
 Annualized IRR  15.1% 32.4% 17.0% 11.6% 19.0%

You can see the open tranches are pretty much a push with R3K.  I have had too many losers (like PERI & GNC).  So this approach did lay an egg in 2016, essentially flat. But still overall, since 2012 this has been a very good approach.


 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
8/1/2015 40.75%        192,117            151,369
9/1/2015 36.41%        178,603            142,195
10/1/2015 43.12%        181,175            138,052
11/1/2015 69.02%        217,959            148,936
12/1/2015 73.49%        223,435            149,946
1/1/2016 63.33%        209,514            146,186
2/1/2016 49.49%        187,428            137,934
3/1/2016 56.48%        194,415            137,934
4/1/2016 47.34%        195,770            148,430
5/1/2016 46.38%        194,301            147,923
6/1/2016 51.44%        201,999            150,558
7/1/2016 50.41%        201,092            150,680
8/1/2016 52.72%        207,223            154,501
9/1/2016 67.04%        222,481            155,446
10/1/2016 42.98%        198,563            155,582
11/1/2016 41.86%        195,726            153,863
12/1/2016 45.92%        202,775            156,859
Current 50.56%        209,503            158,941


Here is how MFI Select stocks fared the final week:


 Stock   Last Week   Current   Dividend   Change 
 RHI              48.95                   48.78                       -   -0.3%
 ATHM              25.58                   25.28                       -   -1.2%
 CA              32.05                   31.77                       -   -0.9%
 AMGN            147.55                146.21                       -   -0.9%
 MPAA              25.66                   26.92                       -   4.9%
 QCOM              66.86                   65.20                       -   -2.5%
 MSGN              21.45                   21.50                       -   0.2%
 VLO              68.96                   68.32                       -   -0.9%
 BRCD              12.45                   12.49                       -   0.3%
 DEPO              18.49                   18.02                       -   -2.5%
 CSCO              30.53                   30.22                       -   -1.0%
 VEC              24.02                   23.85                       -   -0.7%
 TDC              26.97                   27.17                       -   0.7%
 GILD              73.64                   71.61                       -   -2.8%
 CBI              34.20                   31.75 -7.2%
 GNC              10.84                   11.04 1.8%
 PERI                1.35                     1.42 5.2%
 Average  -0.5%


MFI Formula

This week I retired a tranche and started a new one.


 12/31/15 Stocks   Start   Current   Dividend   Pct Gain   R3K Gain 
 BBY  $30.31 $42.67 $1.57 46.0% 12.1%
 GME  $28.34 $25.45 $1.48 -5.0% 12.1%
 ILG  $15.89 $18.17 $0.48 17.4% 12.1%
 PPC  $22.22 $19.14 $2.75 -1.5% 12.1%
 VIAB  $40.93 $35.40 $1.20 -10.6% 12.1%
 Totals  9.3% 12.1%
 4/1/16 Stocks  Start Current Dividend Pct Gain R3K Gain
 CALM  $51.27 $44.18 $0.44 -13.0% 11.8%
 HPQ  $12.10 $14.84 $0.38 25.7% 11.8%
 TIME  $15.24 $17.85 $0.57 20.8% 11.8%
 ILG  $13.85 $18.17 $0.36 33.8% 11.8%
 TSRA  $30.79 $44.20 $0.60 45.5% 11.8%
 Totals  22.6% 11.8%
7/1/2016  Start   Current   Dividend   Pct Gain   R3K Gain 
 ILG  $16.76 $18.17 $0.24 9.8% 7.5%
 VIAB  $44.00 $35.10 $0.40 -19.3% 7.5%
 CPLA  $53.22 $87.80 $0.80 66.5% 7.5%
 HRB  $23.62 $22.99 $0.44 -0.8% 7.5%
 PBI  $17.69 $15.19 $0.38 -12.0% 7.5%
 Totals  8.8% 7.5%
10/3/2016  Start   Current   Dividend   Pct Gain   R3K Gain 
 CPLA  $58.15 $87.80 $0.41 51.7% 4.6%
 LDOS  $43.01 $51.14 $0.00 18.9% 4.6%
 GME  $27.70 $25.26 $0.37 -7.5% 4.6%
 PBI  $18.15 $15.19 $0.19 -15.3% 4.6%
 CSCO  $31.72 $30.22 $0.26 -3.9% 4.6%
 Totals  8.8% 4.6%
12/30/2016  Start   Current   Dividend   Pct Gain   R3K Gain 
 GILD  $71.69 $71.61 $0.00 -0.1% -0.1%
 HPQ  $15.00 $14.84 $0.00 -1.1% -0.1%
 TGNA  $21.33 $21.39 $0.00 0.3% -0.1%
 CA  $31.99 $31.77 $0.00 -0.7% -0.1%
 SYNT  $19.79 $19.79 $0.00 0.0% -0.1%
 Totals  -0.3% -0.1%
 Category/Tranche   October   January   April   July   Total 
 Initial Investment      249,820        249,939     250,180      249,728         999,667
 Current Tranche  8.8% -0.3% 22.6% 8.8% 12.2%
 Previous Tranche  5.5% 9.3% -0.2% -12.5% -1.7%
 Tranche -2  0.5% 11.0%               -                  -   2.9%
 MFI Overall Gain  15.3% 20.9% 22.3% -4.7% 13.4%
 Current Balance      288,048        302,210     305,897      237,905      1,134,060
 R3K Current Tranche  4.6% -0.1% 11.8% 7.5% 5.9%
 R3K Overall Gain  18.1% 11.6% 10.6% 7.2% 11.9%
 R3K Balance      295,060        279,057     276,589      267,615      1,118,321
 Annualized IRR  6.5% 9.9% 12.1% -3.2% 6.4%


Here is month by month results.

 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
8/1/2015 3.71%        107,112            103,404
9/1/2015 4.38%        101,523              97,139
10/1/2015 6.39%        100,703              94,312
11/1/2015 2.93%        104,835            101,907
12/1/2015 -3.48%          99,443            102,926
1/1/2016 -3.36%          96,830            100,012
2/1/2016 -0.72%          93,797              94,367
3/1/2016 4.07%          98,588              94,367
4/1/2016 0.34%        102,371            101,548
5/1/2016 -1.91%          99,774            101,200
6/1/2016 -0.42%        103,145            103,568
7/1/2016 -0.19%        103,022            103,216
8/1/2016 2.56%        109,419            106,857
9/1/2016 -0.34%        106,704            107,048
10/1/2016 -0.85%        106,377            107,230
11/1/2016 0.42%        105,421            105,003
12/1/2016 1.62%        110,705            109,088
Current 1.57%        113,406            111,832


You can see that I am winning, by a bit (1.57% percent) 2+ years in. But current tranches are looking strong (12.2% versus 5.9%), so perhaps starting to gain traction.

Dividend Portfolio

I did add PEO, but nothing else yet.  I may wait until February.

 Dividend Stocks  Start  Current   Dividends   Overall Pct Gain 
 CSQ      9.10       10.27              2.23 37.3%
 AOD      7.64         7.58              1.69 21.3%
 SBRA    22.46       24.42              0.41 10.6%
 TGONF    10.24       12.14              1.85 36.7%
 PSXP    46.95       48.64              0.53 4.7%
 JQC      7.84         8.85              0.64 21.0%
 PSX    80.00       86.41              2.88 11.6%
 DSL    18.43       18.99              1.02 8.6%
 GLDI    10.65         8.94              0.73 -9.2%
 PEO    20.55       20.17                   -   -1.8%
 SJT      5.48         6.62              0.33 26.9%
 O    24.18       57.48           19.49 218.3%
 DHF      3.11         3.36              0.03 8.9%
 OIBAX      5.07         5.61              2.30 56.0%
 Totals  20.5%

1 comment:

Paul T said...

Marsh,

Happy New Years to you too. Thanks for all the hard work you do on the MFI. Your efforts are appreciated.