Saturday, July 29, 2017

MFI Tracking Portfolio - July 29th, 2016

MFI Tracking Portfolio July 29th, 2016

Another month/year has flown by. And so it is time to look at another monthly tracking portfolio as we hit the end of June 2017.  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 to the benchmark by three points, reversing course after a 7 point win last month.  All 11 open portfolios are trailing after 7 of 11 leading a month ago.  It has been a rugged month for MFI stocks.  Here are 8 poorly performing stocks in past month:

Stock Initial Price End Price Percent Change
SQBG  3.88   3.04  -21.6%
DHX  2.85   2.40  -15.8%
FRAN  11.18   9.51  -14.9%
AOBC  23.94   20.45  -14.6%
WNC  21.88   19.03  -13.0%
USNA  64.20   56.65  -11.8%
NHTC  27.85   24.84  -10.8%
PDLI  2.58   2.32  -10.1%

Here are the 50 stocks in descending performance order (from the portfolio that just hit a year):


Stock Initial Price End Price Percent Change 52 week low Mkt Cap
MBUU  13.64   28.55  109.3%  12.35   244 
BBY  32.71   57.64  76.2%  32.02   10,886 
STRA  45.45   79.03  73.9%  44.58   510 
ENTA  22.49   38.04  69.1%  21.00   426 
ACHI  1.99   3.30  65.8%  1.47   220 
MCFT  11.48   18.44  60.6%  10.44   213 
IILG  17.86   26.52  48.5%  10.61   1,034 
KFY  22.62   33.41  47.7%  19.94   1,318 
AAPL  102.25   149.50  46.2%  102.53   562,022 
BPT  14.14   20.50  44.9%  15.00   352 
AGX  45.33   64.35  42.0%  45.51   685 
HPQ  13.56   19.17  41.4%  13.55   23,971 
BRCD  9.12   12.58  37.9%  8.64   3,714 
MSGN  16.05   21.85  36.1%  15.05   1,201 
WNC  14.34   19.03  32.7%  10.74   939 
NSR  25.19   33.30  32.2%  21.10   1,373 
HRB  22.91   30.23  31.9%  19.85   5,246 
NATH  48.57   63.40  30.5%  44.46   203 
BBSI  42.25   54.99  30.2%  41.06   310 
IDCC  58.42   74.90  28.2%  58.19   2,047 
UIS  9.91   12.50  26.1%  8.95   496 
BLBD  14.09   17.55  24.6%  12.87   296 
AMCX  55.36   66.53  20.2%  46.17   4,023 
CPLA  58.63   70.10  19.6%  56.88   695 
VEC  31.15   34.61  11.1%  12.50   332 
TDC  28.38   31.50  11.0%  26.27   3,672 
KBR  13.73   14.92  8.7%  13.16   1,998 
CSCO  29.49   31.52  6.9%  29.12   153,688 
UTHR  121.01   128.35  6.1%  110.90   5,694 
OUTR  52.06   52.00  -0.1%  24.81   906 
MPAA  28.03   27.73  -1.1%  21.75   519 
HSII  18.96   18.45  -2.7%  17.37   362 
ICON  7.20   6.86  -4.7%  5.91   350 
SPOK  17.74   16.35  -7.9%  15.85   381 
CALM  41.90   38.35  -8.5%  33.40   2,034 
PBI  18.38   15.48  -15.8%  12.31   3,688 
USNA  68.66   56.65  -17.5%  52.55   1,642 
VIAB  44.51   35.66  -19.9%  32.68   18,015 
AVID  6.51   5.19  -20.3%  3.99   258 
NHTC  31.91   24.84  -22.2%  20.59   379 
WILN  1.79   1.39  -22.2%  1.27   219 
AMAG  26.53   19.60  -26.1%  16.00   917 
GME  29.14   21.50  -26.2%  20.10   3,219 
SVU  4.88   3.54  -27.5%  2.90   1,293 
KORS  51.72   36.55  -29.3%  32.38   9,337 
SYNT  29.37   19.73  -32.8%  15.82   3,804 
BKE  25.17   16.85  -33.0%  16.00   1,332 
PDLI  3.52   2.32  -34.1%  1.93   578 
FPRX  50.69   28.84  -43.1%  26.65   1,430 
FIT  13.66   5.22  -61.8%  4.90   3,265 


So it seems it was a good time (a year ago) to go boating! MBUU was up 109% and MCFT was up over 60%.

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 23.4% 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 6.5% 13.8% 0
10/30/2015 2.0% 4.0% 0
11/27/2015 8.9% 8.4% 1
12/31/2015 13.7% 12.6% 1
1/29/2016 22.6% 22.4% 1
2/26/2016 27.8% 25.4% 1
3/24/2016 26.5% 19.6% 1
4/22/2016 13.7% 14.8% 0
5/27/2016 14.3% 15.6% 0
6/30/2016 23.2% 16.1% 1
7/29/2016 13.3% 16.0% 0
8/26/2016 12.8% 15.9% 0
9/30/2016 12.7% 15.6% 0
10/28/2016 12.7% 18.2% 0
11/25/2016 3.6% 12.3% 0
12/30/2016 1.7% 10.9% 0
1/27/2017 1.6% 8.3% 0
2/24/2017 -0.5% 4.9% 0
3/31/2017 0.5% 5.0% 0
4/28/2017 0.6% 3.9% 0
5/26/2017 2.5% 2.7% 0
6/29/2017 -1.4% 2.1% 0

Subsets

I also have historically tracked 3 subsets of the larger portfolios:  (1) dividend stocks (those with a yield per Yahoo of at least 2.6%),  (2) new stocks (those new to the tracking portfolios in past 12 months and (3) 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%.

I am starting a new subset - stocks with momentum.

I am officially stopping the dogs and new subsets.  It takes time and they have never really shown any advantage.  The dividend approach has proven merit.  In this portfolio, the dividend subset struggled. (10.7%).

Stock Initial Price End Price Percent Change
BBY  32.71   57.64  76.2%
MCFT  11.48   18.44  60.6%
IILG  17.86   26.52  48.5%
BPT  14.14   20.50  44.9%
HPQ  13.56   19.17  41.4%
HRB  22.91   30.23  31.9%
CPLA  58.63   70.10  19.6%
CSCO  29.49   31.52  6.9%
OUTR  52.06   52.00  -0.1%
HSII  18.96   18.45  -2.7%
SPOK  17.74   16.35  -7.9%
CALM  41.90   38.35  -8.5%
PBI  18.38   15.48  -15.8%
VIAB  44.51   35.66  -19.9%
GME  29.14   21.50  -26.2%
BKE  25.17   16.85  -33.0%
PDLI  3.52   2.32  -34.1%

Two "stinkers" with BKE and PDLI.  In case you were wondering, the momentum approach was 13.2%, so just "average".

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. I think it is obvious why my formula approach is a function of dividend subset.


Category Value
Total  201,299 
Total Russell 3K  239,647 
Dividend  459,504 

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