Monday, January 01, 2018

Initial Thoughts About 2/1 MFI Select Tranche

Initial Thoughts About 2/1 MFI Select Tranche

Well, it is -3 out there on this New Year morning.  Not going to start my running resolution when it is this cold!  So I have fixed up my spreadsheets for the new year and thought I'd write a quick post.

I have already commented on my MFI Formula tranche I will be buying tomorrow.  That means I have a month to laser focus on my February 1st tranche for MFI Select.  Obviously, my Select tranches require more time and research as I pick the stocks as opposed to a formula.  First a quick peek at the tranche with a month left to go:

2/1/2017  Start   Current   Dividend   Pct Gain   R3K Gain 
 AKRX  $19.10 $32.23 $0.00 68.7% 18.7%
 YY  $41.08 $113.06 $0.00 175.2% 18.7%
 KLAC  $85.11 $105.07 $2.26 26.1% 18.7%
 WNC  $17.65 $21.70 $0.18 24.0% 18.7%
 RGR  $52.75 $55.85 $1.36 8.5% 18.7%
 Totals  60.5% 18.7%

That is a memorable tranche.  Hopefully no wheels fall off in next 4+ weeks!  AKRX is being bought by a German company.  YY has simply been one of my best MFI picks ever (it was so cheap a year ago).

Now recall I posted some themes that I felt were important in 2018.  First I do believe tax reform will have a more positive impact everywhere than people are saying.  Be it the consumer with the wealth effect or businesses.  Second, now that the uncertainty of tax reform is behind us, I expect a flurry of M&A activity.  And that is where MFI stocks can shine as they are often accretive to the buyers.  Finally, with my reading of the Acquirer's Multiple, I have a new appreciation for losers.

Looking at the official list now.  Here are some names worthy of research in my view:

AMCX (hey, just watching some of Breaking Bad marathon last night!).
AGX - acting like another new power plant will not be built (this is a candidate to be bought)
CASA - never heard of them An IPO from early January, has already gone from $13 to $17.
EGRX - pharmaceuticals are so hated
KLAC - could just keep them another year.
MPAA - no one seems to value auto parts.
NHTC - I know, they may be a scam. But cheap and hated.
PBI - so cheap, so hated.
SP - the fact that they make the screen does indicate market is extended.  But they look ok.
SYNT - sell off seems overdone.
TVTY - healthcare space might make sense.

Then a few miscellaneous ideas:

HUM (I know, they are an insurance company. But AET/CVS may spur more activity)
TOSYY (don't go for ADRs often, but Toshiba looks cheap)
MOMO - a smaller counterpart to YY.
JMEI - need to convince me they are not a Chinese scam.  But insanely cheap.
TWX - might be short lived, in cross hair of Justice department scrutiny. But with FOX getting bought, an interesting idea.
FUJHY - who doesn't like their Subaru?

Ok, enough rambling.  I will run further screen the last week of January to see if anything looks good/better.


Dmitriy Voznesenskiy said...

Thank you Marsh for your post. By the way have you seen the Acquirer's Multiple screener. Do you think it's good idea to buy stocks from this screener?

Marsh_Gerda said...

I have seen the screener. Seems like as good a place as any to start an analysis.