My Newest Tranche - April 3rd, 2018

My Newest Tranche - April 3rd, 2018

Eight times a year, I hit a one year anniversary date of one of my MFI tranches.  At this point, I sell my five current holdings and pick five new stocks.  I will also increase my $ commitment by about 30%.

The tranche hitting it's anniversary is my MFI Formula, April 3rd, 2017 tranche.  It was a very good tranche, up 21.3% versus 11.0% for the benchmark.  In a large part, it was "luck". Recall my Formula approach is just that, a formula with a random number generator.  The five stocks Mr Random gave me did very well.  But the five stocks that Mr Random excluded were down 5% (largely due to the crashing GME, downabout 38%).   So no time to get over confident.  Here is my expired tranche:

4/1/2017	Start	Current	Dividend	Pct Gain	R3K Gain
BKE	$18.45	$22.00	$2.75	34.1%	11.0%
CSCO	$33.76	$41.01	$1.16	24.9%	11.0%
GILD	$67.50	$73.14	$2.13	11.5%	11.0%
OMC	$85.53	$71.27	$2.25	-14.0%	11.0%
SYNT	$16.76	$25.16	$0.00	50.1%	11.0%
Totals				21.3%	11.0%

Sweet, right?  I will sell OMC today to harvest ST Capital losses and sell the other 4 on Wednesday.  Of course, I will run my screen today... so if I get any repeats, I will not sell but rather will buy/sell as needed to hit required investment per stock.

I like to use anniversary dates to review all closed tranches for the approach.  So here is a listing of all closed MFI Formula tranches:

10/1/2014 Stocks	Start	Current	Dividend	Pct Gain	R3K Gain
BAH	$23.52	$26.21	$0.50	13.5%	-0.6%
BKE	$45.55	$36.97	$3.68	-10.8%	-0.6%
CA	$27.87	$27.30	$1.00	1.5%	-0.6%
GME	$41.70	$41.21	$1.41	2.2%	-0.6%
NUS	$44.56	$41.28	$1.40	-4.2%	-0.6%
Totals				0.5%	-0.6%
12/31/14 Stocks	Start	Current	Dividend	Pct Gain	R3K Gain
CA	$30.83	$29.26	$1.00	-1.8%	-0.3%
CSCO	$28.36	$27.70	$0.82	0.6%	-0.3%
RGR	$34.81	$60.08	$1.10	75.7%	-0.3%
GME	$34.21	$28.71	$1.44	-11.9%	-0.3%
IQNT	$19.87	$17.78	$0.60	-7.5%	-0.3%
Totals				11.0%	-0.3%
3/31/2015	Start	Current	Dividend	Pct Gain	R3K Gain
HRB	$31.99	$26.33	$0.80	-15.2%	-1.1%
GME	$37.69	$32.12	$1.45	-10.9%	-1.1%
KING	$15.85	$18.00	$0.00	13.6%	-1.1%
NSU	$3.43	$3.24	$0.16	-0.8%	-1.1%
PPC	$22.65	$25.40	$0.00	12.1%	-1.1%
Totals				-0.2%	-1.1%
7/1/2015	Start	Current	Dividend	Pct Gain	R3K Gain
BKE	$46.45	$25.51	$1.96	-40.9%	-0.3%
CA	$29.34	$31.53	$1.01	10.9%	-0.3%
MSFT	$44.42	$49.29	$1.39	14.1%	-0.3%
QCOM	$62.95	$53.45	$1.97	-12.0%	-0.3%
VIAB	$64.75	$40.81	$1.60	-34.5%	-0.3%
Totals				-12.5%	-0.3%
10/1/2015	Start	Current	Dividend	Pct Gain	R3K Gain
BKE	$36.83	$24.03	$1.98	-29.4%	13.6%
IQNT	$21.96	$16.14	$0.60	-23.8%	13.6%
QCOM	$53.45	$68.50	$2.02	31.9%	13.6%
CSCO	$26.37	$31.72	$0.94	23.9%	13.6%
CA	$27.30	$33.08	$1.01	24.9%	13.6%
Totals				5.5%	13.6%
12/31/15 Stocks	Start	Current	Dividend	Pct Gain	R3K Gain
BBY	$30.31	$42.67	$1.57	46.0%	12.1%
GME	$28.34	$25.45	$1.48	-5.0%	12.1%
ILG	$15.89	$18.17	$0.48	17.4%	12.1%
PPC	$22.22	$19.14	$2.75	-1.5%	12.1%
VIAB	$40.93	$35.40	$1.20	-10.6%	12.1%
Totals				9.3%	12.1%
4/1/16 Stocks	Start	Current	Dividend	Pct Gain	R3K Gain
CALM	$51.27	$37.55	$0.44	-25.9%	18.0%
HPQ	$12.10	$17.88	$0.51	51.9%	18.0%
TIME	$15.24	$19.35	$0.76	31.9%	18.0%
ILG	$13.85	$20.96	$0.51	55.0%	18.0%
XPER	$30.79	$33.95	$0.80	12.9%	18.0%
Totals				25.2%	18.0%
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	$70.15	$1.64	23.5%	18.8%
LDOS	$43.01	$59.22	$1.28	40.7%	18.8%
GME	$27.70	$20.66	$1.51	-20.0%	18.8%
PBI	$18.15	$14.01	$0.75	-18.7%	18.8%
CSCO	$31.72	$33.63	$1.10	9.5%	18.8%
Totals				7.0%	18.8%
12/30/2016	Start	Current	Dividend	Pct Gain	R3K Gain
GILD	$71.69	$71.64	$2.08	2.8%	20.7%
HPQ	$15.00	$21.01	$0.53	43.6%	20.7%
TGNA	$21.33	$23.69	$0.35	12.7%	20.7%
CA	$31.99	$33.28	$1.02	7.2%	20.7%
SYNT	$19.79	$22.99	$0.00	16.2%	20.7%
Totals				16.5%	20.7%

You can peruse the tables and see the April 2017 was one of my best.  Of my 11 closed tranches, I have "won" 6 and "lost 5.  As regular readers know, my Formula approach has basically been a push with the benchmark - which given performance of value indices and MFI in general since 2014 is not a bad outcome.

Running My Screen

As a refresher, here are the steps I take in creating a MFI Formula tranche:

1. Run 50 over $130m screen from official website (have recently increased from original $100m as I believe this amount should be indexed somewhat with the market).
2. Take the 34 largest stocks from this list by market cap.
3. From that subset, take stocks with dividend yields (either special or regular) greater than 2.4%.
4. Review list and I can discard one stock.
5. Run a random number generator and pick 5 stocks from remaining stocks.
6. Buy and hold for a year.

Ok, here is the official website screen:

Ticker	Market Cap	Price	Dividend	Yield
ACOR	1,032	22.30	-	0.00%
AEIS	2,398	60.51	-	0.00%
AMCX	3,095	50.66	-	0.00%
ABC	18,063	82.67	1.49	1.80%
AMGN	120,652	166.03	4.77	2.87%
AGX	633	40.70	-	0.00%
BIIB	56,421	266.80	-	0.00%
HRB	5,138	24.57	0.96	3.91%
BPT	526	24.60	3.84	15.60%
BKE	1,074	22.00	1.00	4.54%
CELG	66,112	87.07	-	0.00%
CSVI	615	44.05	1.21	2.75%
CNCE	483	19.66	-	0.00%
CJREF	944	4.56	0.89	19.49%
DLX	3,484	72.65	1.20	1.65%
DISCA	12,257	21.58	-	0.00%
EGRX	818	51.25	-	0.00%
EVC	411	4.55	0.18	3.98%
ESRX	38,306	67.87	-	0.00%
GILD	95,594	73.12	2.13	2.91%
HPQ	34,310	21.14	0.54	2.57%
INVA	1,683	16.52	-	0.00%
IDCC	2,517	72.70	1.30	1.79%
IPG	8,687	22.67	0.75	3.31%
JNPR	8,798	24.07	0.48	1.99%
KLAC	16,497	105.33	2.31	2.19%
MDCA	406	6.95	-	0.00%
MSB	332	25.30	2.53	10.00%
MIK	3,558	19.56	-	0.00%
MPAA	400	20.97	-	0.00%
MSGN	1,656	22.00	-	0.00%
NHTC	212	18.73	0.46	2.46%
NLS	403	13.30	-	0.00%
EGOV	875	13.20	0.32	2.43%
NTRI	820	27.30	0.78	2.84%
OMC	16,399	71.27	2.29	3.22%
PTN	219	1.12	-	0.00%
QTRH	172	1.45	0.04	2.72%
RPXC	521	10.49	0.10	0.95%
SRNE	394	4.80	-	0.00%
SP	778	35.00	-	0.00%
SYNT	2,087	25.16	-	0.00%
SYX	1,035	27.90	0.41	1.47%
TGNA	2,348	10.91	0.28	2.57%
TRNC	555	16.49	-	0.00%
TUP	2,396	46.92	2.72	5.80%
UIS	515	10.20	-	0.00%
UTHR	4,916	107.42	-	0.00%
VEC	409	36.79	-	0.00%
VIAB	12,296	30.54	0.80	2.62%

The top 34 stocks (by market cap) are AGX at 633m and greater.  Then filtering that group for dividend yield of 2.4% or greater gives me:

Number	Ticker	Market Cap	Price	Dividend	Yield
1	AMGN	120,652	166.03	4.77	2.87%
2	HRB	5,138	24.57	0.96	3.91%
3	BKE	1,074	22.00	1.00	4.54%
4	CJREF	944	4.56	0.89	19.49%
5	GILD	95,594	73.12	2.13	2.91%
6	HPQ	34,310	21.14	0.54	2.57%
7	IPG	8,687	22.67	0.75	3.31%
8	EGOV	875	13.20	0.32	2.43%
9	NTRI	820	27.30	0.78	2.84%
10	OMC	16,399	71.27	2.29	3.22%
11	TGNA	2,348	10.91	0.28	2.57%
12	TUP	2,396	46.92	2.72	5.80%
13	VIAB	12,296	30.54	0.80	2.62%

I see GME is not on the list, they probably have not gotten their recent 10-K finalized through Compustat.  At this point, I allow myself to throw out a name.  But I will accept them all... VIAB will likely be on sale today with CBS news.

So now I run random number generator to get 5 of this 13.

Random #	Stock
1	AMGN
5	GILD
8	EGOV
12	TUP
13	VIAB

Ok, deep breath.  Always some here that I am not crazy about.  But formula is formula.  Looking back a year, GILD is a holdover.  I will undoubtedly buy some more shares to meet 30% bump. TUP and EGOV are new to me.  AMGN is in my January 2nd tranche.  VIAB is in my November MFI Select tranche.

Final Steps

I will buy my shares sometime today.  The prices I get will be the official starting prices.  I will sell OMC from previous tranche today and the other three stocks (but not GILD) tomorrow.  I will note the Russell 3000 price at the time I make my purchases today as well.

Thanks for reading.