Never too early to start thinking/discussing a new tranche. As my readers know, I have real money in an investment approach I call MFI Formula. It is based on backtesting my MFI database since 2006. Basically, it is a random subset of the official list. The approach is:
- Run 50 over $100m screen from official website.
- Take the 34 largest stocks from this list by market cap.
- From that subset, take stocks with dividend yields (either special or regular) > 2.4%.
- Review list and I can discard one stock.
- Run a random number generator and pick 5 stocks from remaining stocks.
- Buy and hold for a year.
Easy peasy. So here is the tranche coming up on anniversary:
| 12/30/2016 | Start | Current | Dividend | Pct Gain | R3K Gain |
| GILD | $71.69 | $75.34 | $1.56 | 7.3% | 19.1% |
| HPQ | $15.00 | $21.41 | $0.53 | 46.3% | 19.1% |
| TGNA | $21.33 | $21.33 | $0.28 | 1.3% | 19.1% |
| CA | $31.99 | $33.19 | $1.02 | 6.9% | 19.1% |
| SYNT | $19.79 | $25.35 | $0.00 | 28.1% | 19.1% |
| Totals | 18.0% | 19.1% |
Will be a tight finish to see who wins.
I will now walk through the steps I listed above. Now here is the official list from the screen.
| Ticker | Market Cap | Price | Dividend | Yield |
| AMAG | 495 | 14.00 | - | 0.00% |
| AMCX | 3,315 | 52.86 | - | 0.00% |
| ABC | 18,519 | 84.95 | 1.48 | 1.74% |
| AGX | 906 | 58.30 | 1.00 | 1.72% |
| BIVV | 5,340 | 49.36 | - | 0.00% |
| HRB | 5,406 | 25.86 | 0.94 | 3.63% |
| BPT | 442 | 20.65 | 3.60 | 17.44% |
| ABCD | 271 | 5.82 | - | 0.00% |
| CSCO | 186,158 | 37.60 | 1.13 | 3.01% |
| CNCE | 543 | 23.85 | - | 0.00% |
| CJREF | 1,909 | 9.25 | 0.88 | 9.46% |
| DLX | 3,338 | 69.37 | 1.20 | 1.73% |
| DIN | 827 | 45.94 | 3.88 | 8.45% |
| DISCA | 11,112 | 19.46 | - | 0.00% |
| EGRX | 944 | 59.12 | - | 0.00% |
| EVC | 669 | 7.40 | 0.14 | 1.94% |
| ESRX | 36,482 | 64.41 | - | 0.00% |
| GME | 1,905 | 18.77 | 1.52 | 8.10% |
| GILD | 98,469 | 75.34 | 2.03 | 2.69% |
| HSII | 459 | 24.45 | 0.52 | 2.13% |
| HPQ | 35,241 | 21.41 | 0.53 | 2.48% |
| ICON | 107 | 1.87 | - | 0.00% |
| INVA | 1,429 | 13.23 | - | 0.00% |
| IDCC | 2,574 | 74.15 | 1.25 | 1.69% |
| IPG | 7,806 | 20.09 | 0.72 | 3.58% |
| JILL | 267 | 6.10 | - | 0.00% |
| KLAC | 16,277 | 103.87 | 2.26 | 2.18% |
| LEE | 136 | 2.40 | - | 0.00% |
| MCFT | 435 | 23.31 | - | 0.00% |
| MSB | 300 | 22.90 | 1.49 | 6.51% |
| MPAA | 503 | 25.38 | - | 0.00% |
| MSGN | 1,358 | 18.05 | - | 0.00% |
| NHTC | 198 | 17.50 | 0.42 | 2.40% |
| NLS | 396 | 12.90 | - | 0.00% |
| EGOV | 1,120 | 16.90 | 0.24 | 1.42% |
| OMC | 16,917 | 73.38 | 2.20 | 3.00% |
| OPHT | 115 | 3.20 | - | 0.00% |
| PCO | 172 | 6.96 | - | 0.00% |
| PBI | 1,918 | 10.28 | 0.75 | 7.30% |
| SQBG | 113 | 1.79 | - | 0.00% |
| SP | 867 | 39.05 | - | 0.00% |
| SYNT | 2,100 | 25.35 | - | 0.00% |
| TGNA | 2,882 | 13.39 | 0.42 | 3.14% |
| MEET | 180 | 2.50 | - | 0.00% |
| TVTY | 1,418 | 35.85 | - | 0.00% |
| TRNC | 596 | 17.76 | - | 0.00% |
| UTHR | 6,101 | 133.32 | - | 0.00% |
| USNA | 1,687 | 70.45 | - | 0.00% |
| VEC | 357 | 32.20 | - | 0.00% |
| VIAB | 11,428 | 28.40 | 0.80 | 2.82% |
The you have to have a market cap greater than 502m to be top 34. So if we filter on that and the 2.4% yield we end up with these stocks:
| Number | Ticker | Market Cap | Price | Dividend | Yield |
| 1 | HRB | 5,406 | 25.86 | 0.94 | 3.63% |
| 2 | CSCO | 186,158 | 37.60 | 1.13 | 3.01% |
| 3 | CJREF | 1,909 | 9.25 | 0.88 | 9.46% |
| 4 | DIN | 827 | 45.94 | 3.88 | 8.45% |
| 5 | GME | 1,905 | 18.77 | 1.52 | 8.10% |
| 6 | GILD | 98,469 | 75.34 | 2.03 | 2.69% |
| 7 | HPQ | 35,241 | 21.41 | 0.53 | 2.48% |
| 8 | IPG | 7,806 | 20.09 | 0.72 | 3.58% |
| 9 | OMC | 16,917 | 73.38 | 2.20 | 3.00% |
| 10 | PBI | 1,918 | 10.28 | 0.75 | 7.30% |
| 11 | TGNA | 2,882 | 13.39 | 0.42 | 3.14% |
| 12 | VIAB | 11,428 | 28.40 | 0.80 | 2.82% |
At this time, I would review list and see if I should throw out any stock. I am really looking for a stock that I do not believe has sustainable earnings. I might also throw one out if I think I already have a large position. With these 12 names, I see nothing I would toss.
The final step is to run a random number generator.
RESULTS
1 Set of 5 Unique Numbers
Range: From 1 to 12
Range: From 1 to 12
Set #1
1, 11, 4, 12, 8
You can see the picks. I plug those into my workbook.
| Random # | Stock |
| 1 | HRB |
| 11 | TGNA |
| 4 | DIN |
| 12 | VIAB |
| 8 | IPG |
Of course this is just an example. We will see what is on the list and what I pick 12/31.
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1 comment:
Your returns for the 12/30 tranche may be a little better than the overall 18.0% since TGNA spun off CARS.com earlier this year. Or were the spinoff returns wrapped into the TGNA stock to simplify the presentation?
regards,
j
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