Friday, June 30, 2017

MFI Weekly Update 6/30/17

MFI Weekly Update

Good morning everyone.  July 4th is in front of us, great time to fire up the grill and then go see some fireworks.  Hard to believe we are at the 1/2 point for 2017.  And as the Beatles told us, "things are getting a little bit better all the time."  I will also be bidding adios to my July 1st 2016 tranche.  I will close it out and hopefully pick a new one on Monday.  We'll see as I am driving to Pittsburgh.

You have found your way to The MFI Diary, a blog I have been maintaining since 2006 (MFI being magic formula investing from The Little Book That Beats the Market by Joel Greenblatt). .In it I track performance of my own actual MFI investments along with detailed tracking of picking stocks from the MFI screen and my MFI Index (an index comprised of 50 stocks from screen and reconstituted once a year).

People need to know I am just a guy with a spreadsheet, no finance expertise.  So please use what I write for information/entertainment - but if you choose to buy some of the names I buy you should do your own due diligence.

Past Week

Like last week, things have been clicking of late.  I have closed a ton of ground on the index in the past two weeks.


Component YTD
Overall +7.16%
Select +11.96%
Formula +4.70%
Miscellaneous -1.14%
Dividend +8.51%
R3K +8.73%
MFI Index +2.49%


So overall I am up 7.1% this year.  While that trails R3K benchmark (8.7%), I have had about a 20% cash component during the year.  You can also see my MFI Select is up almost 12% - hey, not too shabby.  My MFI Formula approach is up 4.7%.  The MFI Index is struggling at just 2.5%.  GARIX is similar, up 2%.  I was helped a bunch by BAC warrants this week, up over 10% with announcement of increased dividend and share buyback.

I also added to my dividend portfolio this week.  I bought KCLI, a lightly traded life insurer that trades way under book value for $49.  They have a 2.2% dividend.  Not exciting, but strikes me as a very, very safe stock - has a margin of safety.  Then I doubled my position in DHF and JQC.  I will likely be adding to other dividend positions in 2nd half of the year.  I am really starting to realize retirement just is not that far away - I regret selling my CSQ and AOD - and will likely buy them back on any sort of pullback.

MFI Select

I have two MFI portfolios - "Select" and "Formula", each consisting of 4 tranches of five stocks.  Select has been running since August 2012 when I performed my MFI reboot (after sitting out for a year).  It has been very successful.  It is pretty free form, I can pick whatever stocks I want, from the official screen or my homemade screen (which always seems to pick up a few names omitted from official screen).

Here are individual stocks for the week:


Stock Last Week Current Dividend Change
MSGN  22.00   22.45   -    2.0%
ATHM  45.47   45.36   -    -0.2%
AKRX  33.53   33.54   -    0.0%
AMGN  172.50   172.23   -    -0.2%
MPAA  28.32   28.24   -    -0.3%
YY  58.80   58.03   -    -1.3%
RHI  47.46   47.93   -    1.0%
CA  34.98   34.47   -    -1.5%
WNC  21.65   21.98   -    1.5%
RGR  66.60   62.15   -    -6.7%
KLAC  97.95   91.51   -    -6.6%
QCOM  56.91   55.22   -    -3.0%
WSTC  23.21   23.32   -    0.5%
TGNA  23.95   23.29   -    -2.8%
TIME  13.60   14.35   -    5.5%
VLO  65.98   67.46   -    2.2%
CSCO  32.09   31.30  -2.5%
GILD  70.52   70.78  0.4%
GNC  7.54   8.43  11.8%

Wow, I did not realize GNC popped so much.  They are still my smallest position as I am way under water with them.  KLAC is really getting to be a bargain.  TIME has actually been a on a decent roll -it is up 21% in past month.

Here are my 4 tranches:


8/15/2016 Start Current Dividend Pct Gain R3K Gain
 CSCO  $31.20  $31.30  $0.26  1.2% 12.9%
 GNC  $19.79  $8.43  $0.38  -55.5% 12.9%
 VLO  $54.73  $67.46  $2.00  26.9% 12.9%
 MSGN  $16.68  $22.45  $0.00  34.6% 12.9%
 GILD  $79.33  $70.78  $1.98  -8.3% 12.9%
Totals -0.2% 12.9%
11/15/2016 Start Current Dividend Pct Gain R3K Gain
 MPAA  $26.55  $28.24  $0.00  6.4% 12.7%
 ATHM  $22.61  $45.36  $0.00  100.6% 12.7%
 AMGN  $145.14  $172.23  $2.00  20.0% 12.7%
 RHI  $43.23  $47.93  $0.70  12.5% 12.7%
 CA  $31.11  $34.47  $0.51  12.4% 12.7%
Totals 30.4% 12.7%
2/1/2017 Start Current Dividend Pct Gain R3K Gain
 AKRX  $19.10  $33.54  $0.00  75.6% 6.8%
 YY  $41.08  $58.03  $0.00  41.3% 6.8%
 KLAC  $85.11  $91.51  $1.08  8.8% 6.8%
 WNC  $17.65  $21.98  $0.06  24.9% 6.8%
 RGR  $52.75  $62.15  $0.92  19.6% 6.8%
Totals 34.0% 6.8%
5/6/2017 Start Current Dividend Pct Gain R3K Gain
 WSTC  $24.15  $23.32  $0.00  -3.4% 1.3%
 TGNA  $25.75  $23.29  $0.07  -9.3% 1.3%
 TIME  $15.05  $14.35  $0.04  -4.4% 1.3%
 MSGN  $23.55  $22.45  $0.00  -4.7% 1.3%
 QCOM  $54.93  $55.22  $0.57  1.6% 1.3%
Totals -4.0% 1.3%

The May tranche continues to be a mess - down 4%.  August just has the -55% GNC albatross.  Then the other two quarter tranches are great.


Category/Tranche August November February May Total
Initial Investment  25,000   25,000   25,000   25,000   100,000 
Current Tranche -0.2% 30.4% 34.0% -4.0% 16.2%
Previous Tranche 2.8% 8.0% 10.7% 19.1% 8.7%
Tranche -2 11.2% 69.4% -14.3% -25.2% 10.3%
Tranche -3 41.4% 14.2% 8.5% 18.3% 20.6%
Tranche -4 14.1% 43.7% 78.3% 33.0% 42.3%
MFI Overall Gain 84.0% 291.8% 145.9% 34.4% 139.1%
Current Balance  46,009   97,962   61,481   33,608   239,060 
R3K Current Tranche 12.9% 12.7% 6.8% 1.3% 8.4%
R3K Overall Gain 88.6% 92.1% 72.8% 61.6% 78.8%
R3K Balance  47,159   48,026   43,195   40,402   178,782 
Annualized IRR 13.3% 34.3% 22.6% 7.4% 19.4%

Still loving this table.  In under 5 years $100,000 would have become $239,060.  Not shabby.  Then here is month by month:


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 
1/1/2017 45.60%  209,503   163,936 
2/1/2017 45.20%  212,330   167,146 
3/1/2017 48.80%  222,583   173,829 
4/1/2017 55.70%  229,473   173,735 
5/1/2017 55.80%  231,497   175,712 
6/1/2017 53.40%  230,599   177,203 
Current 60.28%  239,060   178,782 

Guess June is done.  It was a good month for the select portfolio.

MFI Formula

Same tables.  I'll go faster.


Stock Last Week Current Dividend Change
CPLA  85.90   85.60   -    -0.3%
GILD  70.52   70.78   -    0.4%
SYNT  16.51   16.96   -    2.7%
CSCO  32.09   31.30   -    -2.5%
TGNA  23.95   23.29   -    -2.8%
HPQ  17.80   17.48   -    -1.8%
CA  34.98   34.47   -    -1.5%
PBI  15.08   15.10   -    0.1%
OMC  82.37   82.90   -    0.6%
BKE  16.80   17.80   -    6.0%
LDOS  53.56   51.69   -    -3.5%
ILG  27.86   27.49   -    -1.3%
VIAB  34.11   33.57   -    -1.6%
HRB  31.25   30.91   -    -1.1%
GME  20.65   21.61   -    4.6%

Overall, pretty flat while the benchmark was down.


7/1/2016 Start Current Dividend Pct Gain R3K Gain
 ILG  $16.76  $27.49  $0.54  67.2% 16.8%
 VIAB  $44.00  $33.57  $0.80  -21.9% 16.8%
 CPLA  $53.22  $85.60  $1.62  63.9% 16.8%
 HRB  $23.62  $30.91  $0.90  34.7% 16.8%
 PBI  $17.69  $15.10  $0.75  -10.4% 16.8%
Totals 26.7% 16.8%
10/3/2016 Start Current Dividend Pct Gain R3K Gain
 CPLA  $58.15  $85.60  $1.23  49.3% 13.7%
 LDOS  $43.01  $51.69  $0.96  22.4% 13.7%
 GME  $27.70  $21.61  $1.13  -17.9% 13.7%
 PBI  $18.15  $15.10  $0.56  -13.7% 13.7%
 CSCO  $31.72  $31.30  $0.81  1.2% 13.7%
Totals 8.3% 13.7%
12/30/2016 Start Current Dividend Pct Gain R3K Gain
 GILD  $71.69  $70.78  $1.04  0.2% 8.6%
 HPQ  $15.00  $17.48  $0.40  19.2% 8.6%
 TGNA  $21.33  $23.29  $0.21  10.2% 8.6%
 CA  $31.99  $34.47  $0.51  9.3% 8.6%
 SYNT  $19.79  $16.96  $0.00  -14.3% 8.6%
Totals 4.9% 8.6%
4/1/2017 Start Current Dividend Pct Gain R3K Gain
 BKE  $18.45  $17.80  $0.25  -2.2% 2.9%
 CSCO  $33.76  $31.30  $0.29  -6.4% 2.9%
 GILD  $67.50  $70.78  $0.52  5.6% 2.9%
 OMC  $85.53  $82.90  $0.55  -2.4% 2.9%
 SYNT  $16.76  $16.96  $0.00  1.2% 2.9%
Totals -0.8% 2.9%

Only winning tranche here is July - that will be starting at scratch on Monday.  I will write up more on the July 1st tranche (as well as my standard review of all closed tranches) later this long weekend.


Category/Tranche October January April July Total
Initial Investment  249,820   249,939   250,180   249,728   999,667 
Current Tranche 8.3% 4.9% -0.8% 26.7% 7.3%
Previous Tranche 5.5% 9.3% 25.2% -12.5% 8.0%
Tranche -2 0.5% 11.0% -0.2%  -    2.8%
MFI Overall Gain 14.8% 27.3% 23.8% 10.9% 19.2%
Current Balance  286,678   318,068   309,735   276,956   1,191,437 
R3K Current Tranche 13.7% 8.6% 2.9% 16.8% 10.5%
R3K Overall Gain 28.4% 21.4% 20.1% 16.4% 21.6%
R3K Balance  320,695   303,424   300,541   290,784   1,215,444 
Annualized IRR 5.1% 10.1% 9.9% 5.3% 7.6%

You can see current tranche continues to be a struggle - trailing 7.3% to 10.5%.  But I still have faith and will be increasing my $ commitment next week.


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 
1/1/2017 1.57%  113,406   111,832 
2/1/2017 1.32%  114,809   113,486 
3/1/2017 -5.09%  112,930   118,024 
4/1/2017 -1.86%  116,227   118,091 
5/1/2017 1.11%  120,403   119,296 
6/1/2017 -2.65%  117,824   120,472 
Current -2.40%  119,144   121,545 

So trailing overall by two points. But you can see the struggle in 2017 going from a 1.57% lead to 2.4% deficit.


Dividend & Miscellaneous

As I said, I am building my dividend portfolio back up.  It has done very well in 2017, up over 8%.


Stock Initial Current Div/Sh Gain/Loss Yield
 JQC   8.20   8.61   0.49  11% 7.3%
 TK   5.24   6.67   -    27% 3.3%
 PSXP   48.20   49.42   -    3% 4.7%
 TGONF   10.47   13.00   1.97  43% 5.3%
 DHF   3.34   3.50   0.07  7% 9.3%
 FDEU   18.21   18.81   0.12  4% 7.7%
 SBRA   24.01   24.10   0.43  2% 7.1%
 NRZ   16.51   15.56   0.50  -3% 12.9%
 RILY   13.85   18.55   -    34% 1.7%
 DSL   18.49   20.65   1.86  22% 8.7%
 KCLI   49.00   49.50   -    1% 2.2%
 O   24.91   55.18   20.12  202% 4.6%
 OIBAX   5.09   5.87   2.38   0.62  4.0%

Recall that this is not the worlds best table.  I double my JQC today, so it has moved to #1 as it is now my largest dividend holding.  But now is shows an 11% gain, but a week ago that was more like 20%. It gets watered down by my having 50% right now at 0%.  I am frankly not motivated to make a better table here as this is not the dividend investor blog.

Here is a table showing my dividend growth over time, assuming it was $100,000 in first year:




So I have definitely had growth - but 2017 has fallen back a bit. I am committed to building that back.

Not much to say on Misc.  I sold all my gold holdings.  I have a few positions counting on buyouts (CA, WBMD and NXPI).  Then I have some riskier plays - biotech and microcaps.  We will see. It has become smaller as dividend portfolio has increased.

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