Sunday, August 27, 2017

8/25/17 MFI Tranche - Dividends & Momentum

Dividends & Momentum Stocks

I have just set up the 8/25/17 monthly tracking portfolio. For those playing at home, here are stocks I considered "dividend" stocks - yield (generally per Yahoo finance) of 2.6% or greater.


Stock Yield
VIAB 2.7%
SYNT 83.1%
PBI 5.9%
OMC 3.0%
NCMI 15.8%
KLAC 2.6%
IPG 3.6%
HSII 2.9%
GILD 2.8%
GME 7.8%
CJREF 7.9%
CSVI 2.7%
CSCO 3.7%
BPT 17.1%
HRB 3.2%


Obviously SYNT was a special dividend.


Here are momentum stocks. I define these as #6 to #25 in past 6 month price change.


Stock
AMCX
AOBC
BPT
CPLA
CSCO
CSVI
DLX
GILD
KLAC
MPAA
MSGN
NATH
PBI
RHI
SCMP
SYNT
TRNC
USNA
UTHR
VEC
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MFI Monthly Tracking Portfolio - August 26th, 2016

MFI Monthly Tracking Portfolio - August 26th, 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 four points, marking the second straight losing month.  All 11 open portfolios are trailing the benchmark, in aggregate by an average of 7.5 percentage points per stock.  Not so Magical right now.

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              13.45           27.43 103.9%       12.91            241
ENTA              22.38           43.09 92.5%       21.52            426
ACHI                1.80             3.20 77.8%         1.47            193
STRA              49.93           79.36 58.9%       44.63            561
AAPL            105.09         159.86 52.1%     102.53     576,745
MCFT              11.99           17.66 47.3%       10.44            222
WNC              13.90           20.27 45.9%       10.74            901
LDOS              38.54           55.86 44.9%       39.51         2,887
TGNA              13.06           18.66 42.9%       11.46         4,477
MYGN              20.66           29.32 41.9%       15.15         1,428
NSR              23.78           33.50 40.9%       21.10         1,296
HPQ              13.93           19.31 38.6%       13.77       24,564
KFY              23.70           32.28 36.2%       19.94         1,381
BPT              15.00           19.50 30.0%       15.00            374
HRB              23.37           29.71 27.1%       19.85         5,350
BLBD              14.45           17.90 23.9%       12.87            310
AGX              48.06           59.15 23.1%       47.18            727
RHI              37.56           44.04 17.3%       34.42         4,989
MSGN              17.71           20.70 16.9%       17.14         1,327
GHC            503.11         582.95 15.9%     440.55         2,793
NATH              48.60           55.50 14.2%       44.46            203
CPLA              59.21           66.40 12.2%       56.88            702
AMCX              54.25           60.45 11.4%       46.17         3,899
UTHR            121.76         128.45 5.5%     110.90         5,713
PDLI                2.86             3.00 4.9%         1.93            470
SPOK              15.97           16.70 4.5%       15.85            342
BBSI              46.80           48.86 4.4%       41.99            343
CSCO              30.28           31.44 3.8%       29.12     156,938
SCMP              11.07           11.30 2.1%         9.30            474
IDCC              69.08           70.40 1.9%       67.55         2,398
DLX              67.56           67.92 0.5%       59.47         3,352
OUTR              51.87           52.00 0.3%       24.81            893
HSII              18.77           18.20 -3.1%       17.37            358
TDC              32.29           30.84 -4.5%       26.27         4,182
GILD              77.56           73.79 -4.9%       63.76     106,174
SSNI              13.95           12.54 -10.1%         9.68            715
WILN                1.55             1.34 -13.5%         1.26            189
KORS              49.59           42.29 -14.7%       32.38         8,583
RECN              14.61           12.30 -15.8%       12.05            546
VEC              33.18           27.43 -17.3%       12.50            356
UIS              10.18             8.10 -20.4%         6.90            510
CALM              44.08           34.60 -21.5%       33.40         2,140
VIAB              40.24           29.19 -27.5%       27.86       16,312
PBI              17.78           12.64 -28.9%       12.31         3,483
FPRX              44.64           30.67 -31.3%       25.97         1,265
NHTC              30.25           20.04 -33.8%       18.05            365
ICON                8.50             5.43 -36.1%         4.79            444
BKE              24.64           15.10 -38.7%       13.50         1,304
SYNT              29.96           18.06 -39.7%       15.82         3,883
AVID                9.31             4.57 -50.9%         3.99            371


Actually some really good stocks in there.  But 6 "stinkers", meaning stocks that lost 30% or more hurt. I know I almost bought AVID last August... so whew!

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 13.2% 16.0% 0
8/26/2016 10.6% 14.6% 0
9/30/2016 9.3% 14.2% 0
10/28/2016 9.1% 16.8% 0
11/25/2016 0.4% 11.0% 0
12/30/2016 -1.3% 9.6% 0
1/27/2017 -1.8% 7.0% 0
2/24/2017 -4.2% 3.6% 0
3/31/2017 -4.3% 3.7% 0
4/28/2017 -5.6% 2.7% 0
5/26/2017 -3.4% 1.5% 0
6/29/2017 -6.2% 0.9% 0
7/28/2017 -5.1% -1.2% 0
Open 11 -1.2% 6.3%

Note the depressing string of zeros at end on right.  That means we have 13 straight portfolios that have either lost or are losing.  You can also see at the very bottom the open 11 tracking portfolios are down 1.2% v + 6.3% for benchmark.


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. (up 7.3%). (My new momentum approach was also up 7.3%).


Stock  Initial Price   End Price  Percent Change
MCFT              11.99           17.66 47.3%
LDOS              38.54           55.86 44.9%
TGNA              13.06           18.66 42.9%
HPQ              13.93           19.31 38.6%
BPT              15.00           19.50 30.0%
HRB              23.37           29.71 27.1%
CPLA              59.21           66.40 12.2%
SPOK              15.97           16.70 4.5%
CSCO              30.28           31.44 3.8%
OUTR              51.87           52.00 0.3%
HSII              18.77           18.20 -3.1%
RECN              14.61           12.30 -15.8%
CALM              44.08           34.60 -21.5%
VIAB              40.24           29.19 -27.5%
PBI              17.78           12.64 -28.9%
BKE              24.64           15.10 -38.7%


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      193,342
Total Russell 3K      236,811
Dividend      433,552



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